At ET Telecom India Mobile Conclave 2018, Reliance Jio reveals ‘real reason’ for stress in India’s telecom sector

In December 2017, Ambani said the telecom companies must stop looking at regulators to guarantee their profits.

FP Staff March 23, 2018 16:00:22 IST
At ET Telecom India Mobile Conclave 2018, Reliance Jio reveals ‘real reason’ for stress in India’s telecom sector

Reliance Jio, telecom arm of Reliance Industries (RIL), has reiterated that the falling revenue of the telecom sector was mainly due to old business model adopted by telecom operators, The Economic Times reported. Representatives from India’s big and small telecom companies were speaking at the ET Telecom India Mobile Conclave 2018.

“If you have antiquated technology and antiquated business models and you have high inefficiencies, then your cost of doing business will get disrupted,” said Mathew Oommen has been quoted in the report as saying.

Apart from Reliance Jio, Bharti Airtel, Vodafone and Idea Cellular are the three main companies in India’s telecom sector which according to a PTI report has lost 40,000 jobs since 2017. The report added that going ahead the total number of job losses in telecom sector may go up to 80,000 to 90,000.

Bharti Airtel, largest telecom operator in India with over 25 crore subscribers, has recorded a fall in its quarterly profits over the past few months. In January, Airtel declared its results for the third quarter ended December 2017.

At ET Telecom India Mobile Conclave 2018 Reliance Jio reveals real reason for stress in Indias telecom sector

Reliance Jio was started in September 2016. Reuters.

It posted over 39 percent fall in its consolidated net profit for the third quarter ended 31 December, 2017 to about Rs 306 crore. The company's net profit stood at Rs 504 crore in the same period previous fiscal.

Airtel competes with the operators like Vodafone, Idea Cellular and newcomer Reliance Jio in the highly-competitive telecom market in India. It also saw its overall revenue declined 13 percent to Rs 20,319 crore, according to revealed figures for the third quarter.

Reliance Industries (RIL) Chairman Mukesh Ambani has defended Jio from many podiums. In December 2017, Ambani said the telecom companies must stop looking at regulators to guarantee their profits, news agency PTI had reported back then.

Amabni who was speaking at the HT Leadership Summit at that time had said that due to Reliance Jio’s entry into telecom sector India has become the world's number one consumer of mobile broadband, using more data than consumers in the US and China.

Three big telecom companies Bharti Airtel, Vodafone and Idea Cellular have been at loggerheads with Reliance Jio over certain issues, biggest among them has been the so called tariff war. Reliance Jio has garnered 160 million customers in the one and a half years of its launch riding on its cheapest data packs and free lifetime voice calls.

Interconnect User Charges (IUC) or the call termination charges has been another big bone of contention among these telecom operators. In September last year, industry regulator Trai (Telecom Regulatory Authority of India) had cut IUC rates by 57 percent to six paise per minute.

Before that, the IUC rate was 14 paise per minute. The incumbent telecom operators raised a foul cry and alleged that Trai was favouring one particular telecom companies. They had even threatened to move to court against Trai’s decision cutting IUC to just 6 paise.

Reliance Jio started its 4G services in September 2016 and since then has offered dirt cheap internet data and lifetime free voice calls on its network. The advent of Jio on India’s telecom landscape has forced the incumbent players to cut data prices and offer equally attractive schemes to survive in the industry.

(Disclosure: Reliance Industries Ltd is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd)

Updated Date:

also read

India's own 5G stack to be ready by Sept-Oct: Ashwini Vaishnaw
India

India's own 5G stack to be ready by Sept-Oct: Ashwini Vaishnaw

Speaking at an event organised by TRAI, Ashwini Vaishnaw said India's indigenous telecom stacks mark "big fundamental technological advancements"

PM Narendra Modi Inaugurates India's first and indigenously made 5G test bed
News & Analysis

PM Narendra Modi Inaugurates India's first and indigenously made 5G test bed

Developed by a team of institutes led by IIT Madras, the test bed will allow Indian tech startups to test their facilities and technologies in India itself, reducing the dependency these companies have on foreign companies and their facilities.

India aims to roll out 6G telecom network by end of decade, says PM Modi
India

India aims to roll out 6G telecom network by end of decade, says PM Modi

Prime Minister Narendra Modi, who was addressing a programme marking the silver jubilee celebrations of the Telecom Regulatory Authority of India via video conferencing, said that connectivity will determine the pace of progress in 21st century India