Sunil Mittal Says Indian Telcos Forced to Write Off $50 Billion Due to Jio Entry

Indian telecom service providers were forced to write off investments of up to $50 billion due to Mukesh Ambani-led Reliance Jio’s prolonged free voice and data offers, and the latter is now opposing a relief package for the debt-laden sector, according to Bharti Airtel chairman Sunil Mittal.

Sunil Mittal

Sunil Mittal

In an interview with ET, Mittal said, ” My estimate is about $40-50 billion have been written off by various companies, many of whom are international investors. It (the write-offs) is largely due to Jio…the pricing. Having such a long, free promotional period and in some sense, decided by laws of the land in their favour, is unheard of. “In my opinion, in Europe or US, this would have been stopped. It would have been seen as predatory,” the telecom czar added.

Reliance Jio, which started operations in September 2016 with free unlimited calls and data till March 2017, which disrupted the Indian telecom space, and brought down profits of top Indian telecom operators. These offers also forced incumbents like Airtel, Vodafone and Idea to cut tariffs to retain customers and stay competitive. The 4G entrant, however, has been charging for its services since April this year, but the offers are still competitive with voice bundled as a free service.

Mittal now reckons that the price war will take two more quarters to stabilise. Notably, Jio is now focusing on achieving profits, having reported an average revenue per user (ARPU) of Rs 156.4 in the September quarter, which was higher than the Rs 154 reported by market leader Bharti Airtel in the April-June period.

Bharti’s top boss also said that Airtel would explore acquisition talks with Maxis-owned Aircel, whose merger with Reliance Communications (RCom) recently fizzled out. Airtel had last year acquired Aircel’s 4G spectrum in the 2300 MHz band in eight circles for Rs 3,500 crore. “I think for them (Aircel), it’s only Vodafone-Idea combination for us. Whenever there will be a possibility of a conversation, I have no doubt; we will be a part of that conversation,” he said.

Mittal also told the publication that Bharti Airtel had benefited from the rapid consolidation in the telecom industry, and it could beat the Vodafone India-Idea Cellular combine to grab the No. 1 slot by revenue market share by March 2019.

“Market has consolidated to a level which was an aspiration, but never thought to be possible. No. 2 Vodafone and No 3 Idea being put together, is unprecedented… you never see two strong companies merging,” Mittal said.

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90 Comments on "Sunil Mittal Says Indian Telcos Forced to Write Off $50 Billion Due to Jio Entry"

 

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Arun
November 27, 2017 10:05 pm 10:05 PM

All in all, I think Indian telecom sector is in a big mess. There is no accountability or Transparency. We haven’t moved an inch forward from the Great Indian scam of 2G spectrum.

Sanjeet
November 27, 2017 9:55 pm 9:55 PM

Hey telecomtalk, how do I know if I get reply on my comments?

Sometimes I forget where and when I wrote any comment.

Atheist
November 27, 2017 10:54 pm 10:54 PM

Enter ur correct email address while commenting

Sanjeet
November 28, 2017 9:26 am 9:26 AM

Lol,,,,I not a high school student.

Never got notification.

Kirti Delhi
November 28, 2017 2:53 am 2:53 AM

Still you won’t get notified? i won’t get notified

Sanjeet
November 28, 2017 9:29 am 9:29 AM

What is the solution?

Does it happen with everyone?

Kirti Delhi
November 28, 2017 8:02 pm 8:02 PM

I don’t know how it works for everyone someone from @TT should answer this..
.
may be i unsubscribed email notification that lies at the bottom of email.
how to revert?

Girish Gowda
November 27, 2017 9:49 pm 9:49 PM

Shouldn’t this thief be happy that foreign investors profits have plummeted because of JIO and that customers are happy because of JIO now?

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