It has been more than a year since India’s richest man Mukesh Ambani rolled out his telecom unit Reliance Jio Infocomm and the disruption it has caused due to prolonged free voice and data offers has badly hurt India’s telecommunication sector.
The Chairman of Bharti Airtel, India’s largest mobile phone services provider, Sunil Bharti Mittal, has said Reliance Jio’s freebies was a major reason for telecom companies writing off investments up to US$ 50 billion, reports Economic Times.
Mittal said such a long promotional offer was unheard of and in Europe or US this would have been seen as predatory and stopped. He pointed out that it has impacted profitability and cash flows of all telcos.
Mittal also accused Reliance Jio of opposing relief package to ailing telcos. An Inter-Ministerial Group was constituted by the Indian government to look into problems faced by the industry, but its recommendations were weak as Reliance Jio had opposed any relief package for telecommunication sector, he added.
Reliance Jio had blamed the older telcos for their own financial plight due to under-investment into their operations and over-dependence on debt funding.
Mittal, however, said the rapid consolidation caused by the entry of Reliance Jio has benefited Bharti Airtel and termed the Idea-Vodafone merger as ‘unprecedented’. He said his company would be open to merger talks with Aircel, owned by Malaysia-based Maxis Communications.
Earlier in February, Bharti Airtel had acquired Norwegian company Telenor’s India unit which had a customer base of 44 million and 43.4 megahertz (MHz) of spectrum in the 1,800MHz band and 20,000 base stations.
It is also in the process of acquiring Tata Group’s ailing telecom unit Tata Teleservices on a ‘debt-free, cash-free’ basis, while taking on a spectrum-related cost of Rs 20 billion (US$ 309 million).