After having won the first round of telecom war, Reliance Jio is all set to begin the second round by offering dirt-cheap feature-rich mobile phones. On the other hand, its rivals — Bharti Airtel and Vodafone-Idea — are also gearing up to face the stiff competition and might soon announce roll out of 4G VoLTE network to counter Jio. Thankfully, customers are going to benefits with cheaper phones bundled with attractive voice/data plans….

NEW DELHI, JULY 9, 2017: Within nine months of its launch, Reliance Jio has clocked around 12 crore subscribers by first launching its free service and then offering very attractive plans. Now when the telecom industry was thinking that Reliance Jio might have hit the plateau, the new entrant is gearing up to launch feature phone priced as low as Rs.1,000. The move is said to be aimed at Reliance Jio’s big rural push.

Industry sources say in Reliance Industries Ltd AGM on July 21, its Chairman Mukesh Ambani might make this announcement offering 10 crore VoLTE-enabled feature phones targeted at rural and lower-middle class customers. Mr. Ambani is also likely to announce new attractive voice/data plans to give the competition, the incumbent operators already reeling under falling revenues/profits, more reasons to worry.

While Reliance Jio left the incumbent operators napping when its launched its services based on superior 4G VoLTE network offering better data speeds, Bharti Airtel, Vodafone and Idea are now upgrading their networks to 4G VoLTE to remain in the competition. As VoLTE offers low cost per minute compared to traditional voice solutions, introducing new technology has become imperative for incumbent operators to arrest their bottom line and top line from shrinking further.

The incumbent operators have already started attractive tariff plans to match Reliance Jio offers, they have also started major network upgradation work. They are also in talks with mobile handset manufacturers to offer cheaper VoLTE-enabled phones to counter Reliance Jio’s offers.

Such stiff competition has hit revenues of telecom industry hard where its adjusted gross revenues (AGR) registered a decline for the third consecutive quarter in January-March of 2016-17, which is also the steepest so far in the sector’s history.

On a sequential basis, the AGR fell by 11% to Rs.40,831 crore in January-March 2016-17 compared to Rs.45,905 crore in October-December. On a year-on-year basis, the decline is steeper at 15.60%. The industry had reported an AGR of Rs.48,379 crore in Q4 FY16. Latest TRAI data shows that the industry’s gross revenues for January-March quarter stood at Rs.63,315 crore, a sequential decline of 4.84% and a year-on-year fall of 7.35%.

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