“Reliance JioPhone Likely to Cause Further Erosion in Revenue For Existing Operators,” Writes Vodafone to Telecom Commission: Report

Reliance JioPhone is now up for beta testing for Reliance employees and some other people. The feature phone will be up for pre-booking from August 24, and the first sale will take place in the first week of September. Before the pre-booking itself, India’ second largest telecom player, Vodafone wrote a letter to telecom commission claiming that the ‘effective free phone’ will further dent the revenues of telecom operators.

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“This is likely to cause further erosion in revenue for existing operators,” the company in a letter to the Telecom Commission Member (Finance) Anuradha Mitra.

“…the new operator continues to aggressively under- price its services, including announcing the launch of ‘Effective Zero Price Feature Phone’ with unlimited voice.”

For the unaware, Reliance Jio Infocomm’s Chairman, Mukesh Ambani, last month announced the JioPhone at the company’s AGM meeting. Effectively priced at Rs. 0, RJIL would collect a fully refundable amount of Rs. 1,500 per unit.

Vodafone also claimed that it has reported a constant decline in its revenues from telecom services, and has even recorded decline of 3.42% in the quarter ended June 2017. The operator also called for reducing the interest rate applied for deferred spectrum payments.

“…a reduction in the interest rate applied for deferred spectrum payments is necessary to reduce the burden on operators. Hence, we have requested a reduction from 10 per cent to G Sec rate of 6.25 per cent – 6.5 per cent on deferred payment,” said Vodafone.

Vodafone also highlighted that the revenue share with the government imposes an enormous burden on telecom operators even though companies purchase spectrum at market price.

Vodafone also “requested DoT to consider the recommendation of the Telecom Regulatory Authority of India (TRAI) for reducing Universal Service Obligation Fund from 5% to 3% as private operators have already rolled out services in rural areas and current call termination rates are very low,” says a PTI report.

“…despite having rolled out in rural areas, we still have to pay USO, and the mobile termination rates are also below cost which adversely impacts us since the majority of the calls in the rural areas are incoming,” the letter said.

For now, a telecom operator charges 14 paise for every incoming call that it receives from other operators. “Therefore, we earnestly request kind consideration and early decision on reduction in the USO levy from 5 per cent to 3 per cent and reduction of interest charges along with rescheduling the payment period, which has been tabled before DoT and IMG (inter-ministerial group),” Vodafone said in the letter.

The Reliance JioPhone is expected to create yet another disruption in the Indian telecom market. Already, telcos are reeling with enormous debt and the revenues are down as well. After the entrance of Jio to the Indian market, Vodafone and Idea Cellular announced their merger, followed by Airtel-Telenor acquisition, and RCom-Aircel merger.

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64 Comments on "“Reliance JioPhone Likely to Cause Further Erosion in Revenue For Existing Operators,” Writes Vodafone to Telecom Commission: Report"

 

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Santhanam R
August 16, 2017 5:56 pm 5:56 PM

The jio phone which is likely to be launched is of Chinese make than should be banned in the national interest else RJIL should reveal the place of MFR.

Nadeem
August 16, 2017 3:02 pm 3:02 PM

When is summer surprise offer going to end

Mrx
August 16, 2017 4:23 pm 4:23 PM

Mine was over by today mrng.

Nadeem
August 16, 2017 5:56 pm 5:56 PM

So had u recharged before or u did it today,mine was yesterday showing validity as 16aug yesterday and now today its showing 17 aug.

Mrx
August 17, 2017 2:47 pm 2:47 PM

Still I’m yet to recharge my no.

Nadeem
August 17, 2017 8:07 pm 8:07 PM

So is ur high speed data and calling working,mine is getting extended every day for one more day.

Rinu
August 17, 2017 9:47 pm 9:47 PM

Then, as you know, it’s better not to recharge till the free benefits are over. What a company? No proper system for anything.

Pramod
August 16, 2017 12:22 pm 12:22 PM

Hi am pramod
I have saw reliance jio 700mhz network in my net velocity app

Arena
August 16, 2017 4:16 pm 4:16 PM

May be app technical error or their R&D team near that location testing a future networks, equipment and devices. 700mhz won’t come until next 2-3 years. Even if govt give BSNL 700mhz, it take1 year to deploy a proper working one. Present situation of Vodafone, idea 2600mhz and Airtel 2300mhz tell that.

addy
August 16, 2017 4:12 pm 4:12 PM

How can that be possible. Please share ss here

Sunny | Lucknow
August 16, 2017 3:50 pm 3:50 PM

Lol that’s a bug in the app.

ARAVIND B A
August 16, 2017 1:50 pm 1:50 PM

Wow…thats a suprise…at what location??? And wch phn u used???

Devraj
August 16, 2017 1:16 pm 1:16 PM

What’s d NET speed in 700Mhz ??
Which state, r u using oneplus5

David
August 17, 2017 1:07 am 1:07 AM

Ok I am not a tech savvy person. So can someone please explain me why all of you are so excited for 700 MHz? What so special about that band?

ARAVIND B A
August 17, 2017 7:48 am 7:48 AM

Since its a sub ghz band it can provide more coverage per tower even when comoared to 850Mhz….and it also has greater penetration capacity than any other higher bands…

David
August 17, 2017 9:51 pm 9:51 PM

Thanks for the info buddy.

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