Reliance Jio has decided to end free voice call for its subscribers and this drew sharp reaction from the competing operators. As per rating agency India Ratings and Research Fitch Group, this move will definitely help Reliance Jio increase its Average Revenue Per User (ARPU). Also, the agency gave a detailed report on how the move is likely to impact Airtel, Vodafone Idea, as well as the overall telecom industry.
The group also said that Reliance Jio’s ARPU could jump by about Rs 9 and EBTIDA by 15-18% – both in the year 2020 if they assume that the usage and calling patterns remain the same and that the zero interconnect charge plans are deferred.
“However, the levy of additional charges by R-Jio will discourage users to call other operators from R-Jio, possibly leading to lower voice traffic on R-Jio network and hence could constrain the telecom giant’s actual EBITDA benefit at 8%-10%,” the group said.
Also, as per the group, rival Vodafone Idea and Bharti Airtel might see lower incoming calls to their network from Jio and this will have a massive impact on their IUC revenues. It was also revealed by the group that the total IUC income of Vodafone Idea stood at 10% whereas Airtel had 3%. Not only this, Reliance Jio’s move will also lead to Airtel and Vodafone Idea losing more subscribers to the former.
So, Mukesh Ambani has played a Trump Card this time against his competitors but will it actually work? Will Reliance Jio’s revenues increase? Or, will the customers switch from the network to some other alternative? Whatever the result may be, it cannot be denied that Reliance Jio has changed the telecom industry in India ever since its entry in the market.
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