Jio effect

The already stressed average revenue per user (ARPU) of telecom operators in the region has taken a “severe beating” with the free data offering by Reliance Jio in the last fiscal.
On an average, the ARPU of leading players in the region comprising Punjab, Haryana and Himachal Pradesh, was hit by 27-35%.
In Jammu & Kashmir, it nosedived by 42%. However, there are other reasons also attributed to it such as ban on use of mobile phones and mobile internet from time to time to maintain law and order.
Reliance Industries had launched Jio 4G services in September last year. The company offered free data till March 31, 2017. Also, the free data was valid during the trial period which initially was made available to the masses in June 2016.
According to the data accessed from the Cellular Operators’ Association of India (COAI), the ARPU of four telecom operators, namely Airtel, Idea, Vodafone and Aircel in Punjab, was Rs 177 during the quarter April-June 2016. However, it plunged to Rs 129 during the January-March 2017 quarter, resulting in revenue loss of around 27%.
In Haryana, the ARPU was Rs 138 during April-June 2016 for three operators namely, Airtel, Idea and Vodafone. Due to free data offering by Jio, the ARPU touched Rs 90, witnessing a decline of around 35%.
In Himachal Pradesh, the telecom players’ ARPU also went down by 35%. During the last quarter of 2016-17, the ARPU touched a new low of Rs 94 as compared to Rs 129 in Q1 of 2016-17. The major players whose ARPU were taken into consideration were Airtel, Idea, Dishnet Wireless and Vodafone.
In case of J&K, it was Rs 163 during April-June 2016. The ARPU of four operators touched Rs 94 during January-March 2017. As per Crisil report, the telcos will continue to face difficulties in fiscal 2018 as well and two of the top three telcos are set to “bleed” due to launch of Jio.