Free offers by Reliance Jio led to 11.7% decline in industry revenues : Jefferies

The telecom industry has lost about 20 to 30 percent of revenue due to Reliance Jio's free services.

    According to the new report by Jefferies, the growth of Reliance Jio subscriber base and its free offering till the end of fourth quarter of 2016-17, has led to an 11.7 percent year-on-year decline (8.5 percent quarter-on-quarter decline) in industry revenues.

    Free offers by Reliance Jio led to 11.7% decline in industry revenues

    It says that Reliance Jio effect was also evident in the decline being maximum in metro and A circles where Reliance Jio has a higher penetration, and where the smartphone ecosystem is better developed

    Meanwhile, Cellular Operators Association of India (COAI), Director-General, Rajan S Mathews on the financial health of the telecom industry recently told Gizbot that the telecom industry has lost about 20 to 30 percent of revenue due to Reliance Jio's free services.

    Free offers by Reliance Jio led to 11.7% decline in industry revenues

    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 reason behind losses, Rajan replied free "offers by one company is the principal reason behind it."

    Free offers by Reliance Jio led to 11.7% decline in industry revenues

    To recall Reliance Jio has managed to add 3.87 million subscribers in the month of April, which is lower compared to March, which was at 5.83 million.

    However Jio is still popping incumbent telcos in terms of user additions in the month and now the telco has a market share of 9.58 percent, which is up from 9.29 percent in March. Airtel, Vodafone India, and Idea Cellular sustained their top three positions in that order, with 23.54 percent, 17.86 percent and 16.69 percent shares, respectively.

    Free offers by Reliance Jio led to 11.7% decline in industry revenues

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