The mobile telecom industry neck-deep in debt at $4 trillion is not in a position to absorb a new dose of the price war. The industry has been undergoing convulsions after the entry of Jio owned by India’s richest businessman, Mukesh Ambani.
Incumbent players Bharti Airtel, Vodafone India and Idea Cellular are now making price policies as a defensive reaction to the moves of the youngest sibling player.
Latest price war indications are coming in the aftermath of the regulator’s order to halt the summer surprise bundled with many free goodies to add more customers.
While expressing the intent to abide by the TRAI order to halt the Summer Surprise, Jio is promising that all customers who subscribed to Jio `Summer Surprise' prior to its stopping date would be ensured the benefits. Then comes the promise of ‘more’ exciting offers on the way to attract new subscribers while retaining existing herd of Jio Prime members.
This has prodded Vodafone India to approach the Telecom Regulatory Authority of India again about Jio not withdrawing its `Summer Surprise' and seeking the regulator's immediate intervention.
But Jio spokesman played down Vodafone;s anxiety and called it an attempt by competitors to create confusion in the market and said Surprise will be withdrawn when it is operationally feasible.
The business sector as a whole is concerned by the arm twisting by a pretty new player rather than creating a decent turf for all. There is unease as players are losing a fair playing field. Reliance Jio with 120 million free users has added more than 72 million users in a month.
`Summer Surprise' offered an extra three months of free services to Prime users who register before April 15 for a fee. For the sector, a drastic fall in wireless Ebitda would amount to defaulting even the interest obligations. Jio needs to look at the larger interests of the sector as well.
Already Jio's actions have bruised the industry and the size cut down to low levels in the near term. The upcoming tariff plans may be dubbed predatory if an adequate regulatory oversight is missed.
On the last day of the financial year, Mukesh Ambani wrote to Jio subscribers and personally assured that the users can expect the best from the company. Jio’s lifetime free voice calls and 1GB of data under the flagship INR 303 plan are luring more and more consumers.