Telecom sector in a state of turmoil

The telecom sector in India is in a state of turmoil, more so because of the exceptional growth of Reliance Jio Infocomm’s subscriber base, which recorded the highest net addition of 56.2 million subscribers – much higher than the other service providers like Idea with 11.7 million and Bharti Airtel with 5.9 million during Q3 of 2016-17.
 
The pre-booking of Reliance Jio Phone priced at Rs 500 is going to be flagged off across Reliance Jio Infocomm Ltd.’s retail stores, the website, and the Jio App from 5 pm on Thursday, according to a message sent out by the telecom firm.
 
Reliance Jio was at the top position as the fastest 4G service provider by registering average download speed of over 18 megabits per second for the month of June, according to a report published by the telecom regulator, Telecom Regulatory Authority of India (TRAI). Bharti Airtel was at the lowest position in the list, registering 8.91 mbps average download speed.
 
To counter Jio, the current incumbent player in the industry, Bharti Airtel, is in talks with handset makers for introducing a 4G smartphone for around Rs 2,500, reported a leading news agency. The escalating price war amongst telecom players on the back of Jio’s entry with free voice and data has been adversely affecting their profitability. 
 
Jio’s pricing scheme has forced incumbent telecom firms to cut voice and data tariffs to around Rs 120 per 1 GB data during January-March 2017. The adjusted gross revenue of the top three telecom companies in India i.e. Bharti Airtel, Vodafone India and Idea Cellular decreased by 7.98%, 5.14% and 4.91%, respectively, during Q3 of 2016-17 as compared to its previous quarter.