Exclusive: Telcos lost 20 to 30 % revenue due to Reliance Jio's free services, says COAI DG

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There is no doubt that freebies offered by Mukesh Ambani-owned Reliance Jio has shaken the market and now whole telecom industry is sitting on a huge debt.

Exclusive: Telcos lost 20 to 30% revenue due to Reliance Jio's free

Jio's aggressive plans have forced others players to cut voice and data tariff, however, the move turned out as a nightmare to them.

Meanwhile, we get a chance to speak Cellular Operators Association of India (COAI), Director-General, Rajan S Mathews on the financial health of the telecom industry.

Exclusive: Telcos lost 20 to 30% revenue due to Reliance Jio's free

He said, that the telecom industry has lost about 20 to 30 percent of revenue due to Reliance Jio's free services. Earlier, before Jio came into the game there were losses but year over year revenue was increasing.

Rajan also pointed out that 2016- 17 was the first year in the history of telecom industry that total revenue of the industry has declined.

When asked about, whether Jio was the the reason behind losses, Rajan replied free "offers by one company is the principal reason behind it."

Exclusive: Telcos lost 20 to 30% revenue due to Reliance Jio's free

In a recent past, India Ratings and Research (IndRa) firm also said that Indian telecom industry has lost around 20 percent revenues due to free services being offered by Reliance Jio.

It says, smaller telcos may not be able to sustain cash burn by operating independently and are looking for exit options.

On the other hand, Jio recently said that telecom operators are not investing in new technology and instead leveraging their balance sheet for financial woes in the industry.

Exclusive: Telcos lost 20 to 30% revenue due to Reliance Jio's free

The company also said that incumbent telecom players need to raise funds by selling the stake, at inter-ministerial group meeting .

"Operators (excluding Jio) need to invest Rs. 1,25,000 crores, pay back debt and they need to invest in technology, as growth is happening in data... they can do this by selling a stake," said a senior Jio official.

The official said that the financial stress being faced by operators was "their own creation", and the only policy intervention required is in form of reduction in GST rates, license fee, and USO levies. Lowering of these levies can generate Rs. 20,000-25,000 crores additional EBITDA for the industry.



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