Indian telcos fear new voice price war

06 Jul 2015

India's mobile industry fears that the upcoming launch of Reliance Jio Infocomm's pan-India 4G services could trigger another damaging price war over voice services.

The operator's plan to offer voice services at half or lower current average voice rates could have a devastating impact on an industry still feeling the effects of the damaging price wars on and around 2009.

Unnamed telecom executives quoted by India's Economic Times expressed concerns that the new competition could squeeze out established operators.

The industry already has between 7-8 operators providing services in each telecom circle, an abnormal level of competition for a mobile market. As well as the impact of the price war, many operators are still struggling with high debts accrued from spectrum auctions.

Reliance Jio parent Reliance Industries' previous foray into the telecom sector in 2003 also demonstrated that the company is willing to burn cash to accrue subscribers and build up a market presence.

In addition, because Reliance Jio's model is primarily a data play, the company may even be willing to offer voice for free, one executive quoted by the report speculated. Reliance Jio has already demonstrated a willingness to treat voice as a value-add, having recently launched an OTT chat app.

Reliance Jio plans to launch services at the end of the year, and has been busy arranging network sharing deals to help with its nationwide rollout.

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