Bharti Airtel Chairman Sunil Mittal says Jio entry will result in massive erosion of tariffs

By July 1st, 2016 AT 4:46 PM

Bharti Airtel Chairman Sunil Mittal has said that impending entry of Reliance Jio will lead to “massive erosion of tariffs” in the Indian telecom industry, expressing concerns over the impending launch of Mukesh Ambani-owned 4G telecom operator. According to media reports, Mittal said that Jio’s entry is going to add to pressure in the market, which would lead to massive erosion of tariffs.

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Earlier, Aditya Birla Group Chairman Kumar Mangalam Birla said in an interaction with the Economic Times had said that Jio will create an upset for all the existing telecom operators. “When you have a new entrant with such deep pockets, then that is bound to happen…The sector will, however, see a lot of changes next year,” he had said.

Reliance Jio is anticipated to unleash disruptive 4G data price plans to poach top-end data customers from incumbent carriers such as Bharti Airtel, Vodafone India and Idea Cellular in urban markets.

Jio, which already serves to over 7 lakh subscribers in the country, may start operations towards the end of this year, but some reports suggest that the launch may take place in September this year following rigorous testing of its network and services. As per media reports, the average data usage per subscriber of Reliance Jio stands at 18.6 GB, which translates into a total usage of 13 million GB.

Mittal also expects that only four private telecom operators will to remain in the next two years, as consolidation pick pace in the Indian market. He said that consolidation would improve the health of the industry.

Currently, RCom is leading the consolidation drive in the market, and has already gotten approvals to merge operations with Sistema’s India unit. In addition, the Anil Ambani-owned company is very close to further merge wireless operations with Aircel.

“Besides BSNL/MTNL, I expect only four operators to remain in 24 months,” Mittal said. He indicated that Airtel, Vodafone India, Idea Cellular and Reliance Jio will be the potential survivors.

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