Data tariffs may fall 20% with Reliance Jio's entry: Fitch


NEW DELHI: The entry of Reliance Jio Infocomm in the telecom space will intensify competition and may bring data tariffs down by at least 20%, Fitch Ratings said today.

It, however, said no tariff wars are expected as witnessed during the 2009-2013 period.

"The likely entry of new telco Reliance Jio, which is a part of Reliance Industries Ltd in 1H15 will intensify competition in the data segment, and may cause data tariffs to decline by at least 20%," Fitch said in its 2015 outlook for Indian telecommunications services.

Reliance Industries had announced that it would launch commercial 4G telecom service of RJio in 2015 entailing investment of Rs 70,000 crore.

Fitch said Jio will focus largely on data and may have a limited impact on the incumbents' core voice business, given a weak "voice-over-LTE" technology ecosystem and lack of affordable 4G-compatible handsets in India.

"We do not foresee a re-run of the tariff wars of 2009-2013, which led to a severe decline in industry tariffs," Fitch said.

Fitch expects the top four Indian telcos — Bharti Airtel Limited, Vodafone India, Idea Cellular and Reliance Communications — to increase their revenue market share to around 83% by 2015 from the current 79% in the $-30 billion industry.

"The likely entry of new telco Reliance Jio, which is a part of Reliance Industries Ltd in 1H15 will intensify competition in the data segment, and may cause data tariffs to decline by at least 20%," Fitch said in its 2015 outlook for Indian telecommunications services.

Reliance Industries had announced that it would launch commercial 4G telecom service of RJio in 2015 entailing investment of Rs 70,000 crore.

Fitch said Jio will focus largely on data and may have a limited impact on the incumbents' core voice business, given a weak "voice-over-LTE" technology ecosystem and lack of affordable 4G-compatible handsets in India.
"We do not foresee a re-run of the tariff wars of 2009-2013, which led to a severe decline in industry tariffs," Fitch said.

Fitch expects the top four Indian telcos — Bharti Airtel Limited, Vodafone India, Idea Cellular and Reliance Communications — to increase their revenue market share to around 83% by 2015 from the current 79% in the $-30 billion industry.

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