Jio effect: advertisement spend of telcos spurts by 50%

After Jio’s path breaking entry into the market, telecom firms raised their advertising expenditure by 50% to around Rs 1,000 crore in 2016, and they could increase it by upto another 15-20% this year, as per market wide speculation.

Together, the four firms have spent around Rs 1,000 crore, according to the report in a leading financial daily.

Reliance Jio Infocomm Ltd., launched its services in September last year, offering free data and voice till the end of March 2017. Its high-decible launch prompted furious advertising by its main rivals, Bharti Airtel Ltd., Idea Cellular Ltd., and Vodafone India Ltd. Idea and Vodafone have since announced their intent to merge. Also, Bharti Airtel to acquire Telenor India communication (erstwhile Uninor).

Nearly half of the overall advertisement expenses of the four firms, was spent by the market leader Airtel, wherein it spent Rs 450-550 crore on advertising as against Rs 250-350 crore in 2015; while Reliance Jio just spent Rs 100-150 crore, according to the report.

Reliance Jio recently crossed the milestone of 100 million subscribers in 170 days, adding seven customers on an average every second.

This year also an  intense competition between the telcos is expected, as incumbent players will fight to sustain their position in the telecom industry. As also, the new entrant, Jio, will fight to gain a leadership position in the market.