Airtel claims that Reliance Jio has cost India’s operators $50B

Airtel claims that Reliance Jio has cost India’s operators $50B

Reliance Jio’s Reliance Jio’s disruptive entry into the Indian market forced India’s incumbent operators to write off investments of $40-$50 billion, according to Bharti Airtel chairman Sunil Bharti Mittal.

Mittal claimed that the extended discounts offered by Jio – which amounted to the operator delivering its services for free – would have been deemed “predatory pricing” if they have been provided by a US or European operator, and suggested that regulators in these markets would have put a stop to the discounts.

Jio’s entry into the Indian market in September 2016 saw it offering free voice and messaging services along with heavily discounted data, spurring operators to call for intervention from the country’s regulator TRAI. Operators have seen consecutive quarters of losses since, with Airtel, Etisalat, RCom, Tata, Telenor and Vodafone all seeing a drop in revenue and profit.

However, according to Mittal, one upside of Jio’s entry into the market has been the wave of consolidation that it has prompted. The Airtel chairman noted that he “never thought [it] possible” that the number of players in the Indian market would decrease at such a rapid rate.  

Airtel has bought up the consumer mobile operators of Tata Sons, benefiting from consolidation even as its rivals Vodafone India and Idea Cellular prepare to merge. The combined entity of the second and third placed players would overtake Bharti Airtel as the market leader in both revenue and customer numbers, but Mittal is expecting this state to be temporary, claiming that Airtel will regain its lead in revenue over the next fiscal year.

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