Jio launch and it’s post effects.

Posted By : Team SMI

When Mukesh Ambani launched Reliance Jio Infocomm Ltd at 42nd annual general meeting on September 5th   . Under free welcome offer, user gets to access internet, voice and all Jio offers for free even  Ambani termed it as the largest introductory offer anywhere in the world. Indian telecom sector entered into new era.

But during all these events BSE Telecom Index was down by 2.6% . Stock Market sentiment was clearly evident top three telecom company lost about RS 13, 165.55 crore in market value.  Bharti Airtel, Idea Cellular and Reliance Communication lost Rs 8.454.49 crore, Rs 3,528.79 crore and Rs 1,182.27 crore respectively however Reliance Industries was trading up 0.9 % at RS 1067.70 .

So, What is the future of Indian Telecom Industry ?

India is currently the world ‘s second-largest telecommunication market and has registered a strong growth in the past decade and half. International Data Corporation (IDC) predicts India to take to takeover US as the second – largest smartphone market globally by 2017 and to maintain high growth rate over the next few years as people switch to smartphones and gradually upgrade to 4G.

So 4G to become new battle ground for Telecom operators.

All telecom players will  have a uphill battle due to volatile customer expectation and drive ROI due to huge capital investement and high spectrum fee. Industry debt to go up by Rs 4,25,000 crore by March 2017 which was about Rs 2,90,000 crore in March 2014. With pricing pressure due to free offers and lower tariffs, companies are likely to witness stagnant EBITDA growth for the next six to eight quaters.

But by transforming their strategies and their infrastructure , comapnies can improve ROI and Qos . According to Paolo Colella  MD Ericsson India ” India is set to become the engine for the growth for the internet. India has a formidable IT force and with a vast population, the market possibilities for telecom service providers are huge. “

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