The Indian telecom space is packed with various operators, who compete fiercely with each other in order to grab more and more number of subscribers. As per Fitch Ratings, the entry of Reliance Jio Infocomm will further aggravate the situation and due to the increasing competition the data rate might come down by 20 per cent.
As per the PTI report, Fitch stated in its 2015 outlook for Indian telecommunications services, said, “The likely entry of new telco Reliance Jio, which is a part of Reliance Industries Ltd in 1H15 will intensify competition in the data segment, and may cause data tariffs to decline by at least 20%.”
Fitch also said that, Reliance Jio will mainly focus on data and may have limited effect on voice calling services due to the weak ‘voice-over-LTE’ technology ecosystem and lack of affordable 4G-compatible handsets in India. Reliance Jio is all set to introduce its 4G services in the country with the investment of Rs 70,000 crore.
Fitch further states that the market share of telcos like Airtel, Vodafone, Idea Cellular and Reliance will increase from 79 per cent to 83 per cent by 2015. Moreover, the industry revenue will also increase at a mid-single-digit rate in 2015 determined by data services. The top four telcos’ 2015 average operating EBITDA margin will be mostly unchanged at 32-33% (2014: 32%) as a decline in data tariffs will offset a gradual rise in voice tariffs.