Reliance Jio Ended the Streak of Profits for Incumbent Telecom Operators With Its Competitive Tariff Plans

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The entire Indian telecom segment is baffled with the launch of Reliance Jio 4G services. What started as a 'Welcome Offer' is now converted to 'Jio Dhan Dhana Dhan' offer providing similar benefits to the consumers of India. However, with its aggressive moves and free 4G services, the Mukesh Ambani's company has impacted the incumbent telecom firms revenue by a huge margin.

Jio-India-data

According to a recent report from brokerage CLSA, the annual revenue of operators in India has declined by almost three to four percent to Rs. 1.88 trillion in FY 2016-17 from Rs. 1.93 trillion obtained in the FY 2015-16. It is also expected that the revenue will further deplete to Rs. 1.84 trillion in FY 2017-18. Furthermore, the report stated that the revenue would be settled at Rs. 1.87 trillion in FY 2018-19, which is almost equal to the revenues obtained in the FY 2014-15.

According to the data released by TRAI recently, the gross revenue for 11 telecom operators in the country is settled at Rs. 34,835 crores in the third quarter of FY 2016-17, which is almost down by 10 percent from the previous quarter revenues of Rs. 37,302 crores.

However, do make a note that both the CLSA brokerage report and TRAI data did not include the revenues of Reliance Jio as the new entrant just started charging its consumers.

According to TRAI, India's leading telecom operator, Bharti Airtel saw its market share dip to 33 percent with almost 0.5 percent drop from the previous quarter. On the other hand, the consolidated firms Vodafone and Idea market share has seen a rise to 23.8 % and 20 % respectively.

On the flip side, the Mukesh Ambani-led Reliance Jio is looking the market in a whole different manner. The new entrant assesses that the revenue of Indian telecom industry will be up by 50 percent from current Rs. 1.88 trillion by 2021. The company also estimates that the market will become more data-driven, which will pave its way for more revenue from data and also claims that the voice revenue will be further depleted to Rs. 0.5 trillion from the present Rs. 1.5 trillion.

The reason for the downfall in the revenue of Indian telecom firms is the cut throat tariff plans and aggressive free 4G services from Reliance Jio, which made other telecom operators offer the same benefits.

For example, if you consider the Indian telecom scenario a year ago; consumers used to pay almost Rs. 250 for 1GB of 4G data. And now, they are now getting to 1GB data per day at the same price with better validity. And special thanks here goes to Reliance Jio for changing the entire scenario.

At present Jio is running its Dhan Dhana Dhan offer with benefits of 1GB data per day along with unlimited calling at just Rs. 309 for 84 days. To rival with Jio; Airtel and Idea also came up with similar benefit plans and almost same validity period.

Reported By

Managing Editor

Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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