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

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.

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

 

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Shivang Singh (SS)
April 17, 2017 5:39 pm 5:39 PM

Jio services have currently gone crazy, the already bad speeds are now unusable and surprisingly My Jio automatically logs in even without a Jio SIM card and network. I was waiting for something to improve but the wait seems to be forever.

Rhishav (Kolkata)
April 17, 2017 8:04 pm 8:04 PM
Yes Shivang bhai Jio is yet to stabilize as a network. I Don’t know what they will do when they will have subscriber numbers comparable to Airtel or Voda-Idea. And for anyone commenting that Jio is a new network and others are very old and experienced, please stop your bull shit Jio has been preparing for it’s services since the last 6-7 years and it is not a small amount of time. Plus Mukesh Bhai already has experience in the telecom sector since his last launch of RCom. Please get your shit together Jio. I don’t want you to lose… Read more »
Kaushik Roy
April 17, 2017 5:12 pm 5:12 PM
It is better not to use JIO SIM, which are not recharged yet with either of prime (99 or 303 ) and getting free service even after 15.04.2017. JIO has copy of Aadhar and they can deduct payment on account of non payment. Dont trust Reliance or Mukesh Ambani. In 2003 also it happened and subscribers getting huge bills after months of free service due to delay in bill generation by RIM. Who will fight against JIO in case they charged or demanded some amount. It may be a guess and I may be wrong,but I am not using the… Read more »
arpit
April 17, 2017 6:44 pm 6:44 PM

thanks for the caution ….what is the last date for JDDD offer ??

S | L
April 17, 2017 6:40 pm 6:40 PM

Wow, standing ovation for the Aadhaar based deduction logic.

geek
April 17, 2017 11:22 pm 11:22 PM

LOL

Abishek Naagendra
April 17, 2017 4:45 pm 4:45 PM

Does this mean BSNL will get back to severe losses? When are BSNL and MTNL going to merge?

S Gopal
April 19, 2017 1:40 am 1:40 AM
There was a post by telecom talk a free days ago that showed in certain circles BSNL revenues having increased for their wired services as well as mobile services. The net effect shall need to be seen. Most likely that many a state revenue dropped and the overall likelihood might not be a big improvement from last financial years revenue but might not be doomsday like As for the merger, even the CMD of MTNL has stated that they welcome the idea, however, the pragmatic approach as pointed out by CMD of BSNL is to write off the debt of… Read more »
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