Telcos to bleed this fiscal as well due to Jio, says Crisil
Telecom operators will continue to face difficulties in 2017-18 as well and two of the top three telcos are set to "bleed" due to intense competition from Reliance Jio, a Crisil report said. For this fiscal, Crisil sees a muted 0-5% revenue growth for top telcos. Notably, Jio is estimated to have cornered 55% of total data consumption since launch.
Mumbai, Apr 24 (PTI) Telecos will continue to face difficulties in fiscal 2018 as well and two of the top three telcos are set to "bleed" due to intense competition triggered after the launch of Reliance Jio, a report said today. "The price war in the Rs 1.5-trillion wireless telecom market will continue this fiscal year as well leaving bruised bottom lines," Crisils said in a note today. "Two of the top three telecom players will bleed this fiscal," it added. It attributed the difficulties faced by the sector to the price war for data subscribers, but added market leadership is crucial to the business and if anything, competition will only heat up this year. The note explained that global experiences have shown that the market leader enjoys superior profitability. The report said two of the top three telcos will end last fiscal year with net losses, and this trend is expected to continue in the current fiscal year as well. Since its launch last September offering free services for almost six months, Jio is estimated to have cornered 55 per cent of total data consumption, while the overall data traffic has grown five times in the last one year, it said. "A 60 per cent fall in 4G data prices since launch of Jio has resulted in muted 2 per cent growth in adjusted gross revenue last fiscal year," the report said. 