Reliance Jio claims rivals made $15B by inflating prices - Mobile World Live

Reliance Jio claims rivals made $15B by inflating prices

20 JUL 2017

Indian newcomer Reliance Jio accused established rivals of accumulating more than $15 billion by inflating prices and benefiting from inadequate regulation.

In one of its biggest crticisms levelled at larger operators Bharti Airtel, Vodafone India and Idea Cellular in an ongoing feud, Jio said its rivals had made bumper profits because the country’s regulator failed to follow through on recommendations made in 2011 to bring down prices.

Citing people briefed on the matter, Financial Times (FT) reported representatives from Jio argued the point at a meeting with the Indian regulator.

The Telecoms Regulatory Authority of India (TRAI) reportedly met with all the country’s telecoms companies this week to hear their views on how much it should cost to interconnect calls on other networks, with new regulations set to be announced this year.

Civil war
Owned by Indian billionaire Mukesh Ambani’s (pictured) Reliance Industries, Jio’s entrance in September 2016 ignited a price war in the country, after it came to market by initially giving away free mobile data and voice to consumers.

Within 170 days of commencing operations, it had attracted 100 million customers, with the bulk of the new subscribers coming from smaller players including Aircel and Reliance Communications, according to a recent report by brokerage company CLSA.

In fact, despite Jio’s aggressive push, the country’s three largest operators’ market shares by subscribers dropped only slightly, Mobile World Live reported earlier this month.

However, the country’s more established rivals have still been irked by Jio’s tactics, accusing the new entrant of breaching market rules, which could be considered as unfair competition.

One of the biggest complaints centred around Jio’s free offer, which it said lasted for six months, three months more than regulation allowed.

Jio defended the offer by claiming it was, in fact, two separate three-month promotions.

In its latest onslaught, Jio said the regulator failed to implement price cuts which meant India’s three largest operators saved INR1 trillion ($15.5 billion).

Idea Cellular’s chief corporate affairs officer Rajat Mukarji declined to comment on the figure, but said the country’s larger operators had lost money by having to connect free calls made by Jio’s rising customer base, FT reported,

Airtel, meanwhile, dismissed Jio’s allegations, and Vodafone reportedly declined to comment.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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