India has an ever growing 2 billion telecom (telephone, mobile) subscribers. Before Jios majestic arrival prices and connectivity both soared. But Jio tried changing that on both the spheres. Its entrance into the telecom sector has led to a massive ripple effect. India’s 2nd and 3rd largest operators Vodafone India and Idea Cellular have agreed to a 1.5lakh crore deal which will make them world No. 2 after China Mobile. Airtel is no longer number 1. Telenor has decide to exit India by it being acquired by Airtel. There is a prediction of 1 million jobs being lost in one of the most sought after sector in our country. The industry’s never ending debt is going to surpass 4,60,000 crore
Every story has two sides and so does this one. Jios entry has made access to internet that to 4G every man’s ability. Competing companies have started lowering their ever increasing prices. Jio has made its place in a matter of 7 months in a highly competitive and price sensitive market, with a few problems such as denial of POI (Point Of Interface) due to which its competitors face a fine of 3050 crore levied by TRAI.
But on the other hand the competitors claim that they did abide by the telecom guidelines to be followed when a new entrant enters the market. Impact of lower tariff and hence decline in revenue of telecom operators would lead to a delay in their spectrum payment. Airtel claims Jios plan to be “a strategic business tactic adopted to enhance market power with the objective of eliminating competition which it has succeeded to a large extent during the quarter Oct to Dec 2016 itself,”
I personally believe that Jios extravagant entrance to telecom sector has had its positives and negatives. But too many freebies never end up on good terms in the cycle of economics, capitalism and a consumer friendly market.
Bookaholic Meets Finance Aficionado 