Devesh
Core Member
Reliance Jio: Reliance Jio entry: Airtel, Vodafone, Idea warn cut-throat mobile tariffs may lead to bloodbath, Telecom News, ET Telecom
Bharti Airtel chairman Sunil Mittal warned the government that only one or two non-state phone companies would stay in business if current levels of competition persisted with tariffs pegged well below cost, according to four people aware of discussions that took place between leading carriers and telecom minister Manoj Sinha on Thursday.
He was backed by B Sriram, MD of State Bank of India, they said. Mittal said an operator with a “strong balance sheet” was shaking up the industry and referred to what happened in 1996, when policy reforms had to be put in place to revive the sector, according to the people cited above.
The entry of Mukesh Ambani backed Reliance Jio has disrupted the sector with free voice and low data rates, leading to a tariff war that has worsened the financials of the debt-laden industry and prompted the government’s meeting with companies and lenders.
Sriram warned that business viability would be a casualty and no bank or financial institution would lend to telecom companies if the current levels of decline, owing to intensified competition triggered by a new entrant, were left unchecked.
Bharti Airtel chairman Sunil Mittal warned the government that only one or two non-state phone companies would stay in business if current levels of competition persisted with tariffs pegged well below cost, according to four people aware of discussions that took place between leading carriers and telecom minister Manoj Sinha on Thursday.
He was backed by B Sriram, MD of State Bank of India, they said. Mittal said an operator with a “strong balance sheet” was shaking up the industry and referred to what happened in 1996, when policy reforms had to be put in place to revive the sector, according to the people cited above.
The entry of Mukesh Ambani backed Reliance Jio has disrupted the sector with free voice and low data rates, leading to a tariff war that has worsened the financials of the debt-laden industry and prompted the government’s meeting with companies and lenders.
Sriram warned that business viability would be a casualty and no bank or financial institution would lend to telecom companies if the current levels of decline, owing to intensified competition triggered by a new entrant, were left unchecked.
