- The penalty amount of Rs. 30.5 billion is suggested by authorities.
- Jio leads airtel in Revenue Market Share (RMS) by a margin of 4 percent.
Reliance Jio secured another win over their arch-rivals Bharti Airtel and Vodafone Idea. They will have to pay a fine for denying the interconnection with Jio when it entered the market in 2016.
The Dispute
Digital Communications, Department of telecom’s highest decision-making body approved the penalty. The initial suggested amount is of Rs. 30.5 billion as the panel asked Telecom Regulatory Authority of India (TRAI).
Approval of the penalty came with a negative impact on shares of both Airtel and Vodafone. Their shares fell by 2.6 percent and 3.8 percent respectively.
Reports said Vodafone Idea and Airtel both failed to comply with their agreements for interconnection with Reliance Jio because of which Jio users failed to use the services.
Jio is gaining numbers in India. It currently numbers over 306.7 million users in India. Rivals of Jio were continuously under threat due to its rising prominence. Vodafone and Airtel lost a huge chunk of users in March 2019 and their tally stands at 394.8 million and 325.1 million respectively.
Huge Jio Expansion Plan
Amidst all this, Mukesh Ambani plans an aggressive expansion of Reliance Jio. It’s decent growth in the last 33 months of its launch as a telecom network is one of the major factors of this expansion. RIL plans to launch 5G and e-commerce play with another investment of Rs. 20,000 crore.
The company now looks to reach out to more people in smaller towns and focus on the expansion of its services including GigaFiber fixed broadband services.
Industry experts stated that RIL has everything to back this huge expansion plan.
As per Industry Observers, RIL has all the products, supply chains, tech team, internet user base, logistics capability and huge capital to back it up to its plan.
Started in 2016, Ambani led telecom network has garnered a subscriber base of 306.7 million and a revenue market share (RMS) of 31.7 percent as of March, which is more than Airtel’s 27.3 percent.
Jio’s net profit rose four times to Rs. 2,964 crore, from Rs. 723 crore in 2017-18. In the March quarter of FY 2018-19, the company witnessed an increase of 7 percent to Rs. 11,109 crore.
In September last year and March this year, Jio emerged as the only network to add mobile subscribers in those months.
Jio, in the month of March, has added about 9.4 million users, whereas all other telecom operators lost subscribers, according to latest TRAI subscription data.
