Vodafone India Embarked $3 Bn - Bad News for Reliance Jio


Vodafone India was on the verge of filing for IPO to recover its investment as well as to reduce mounting debt. Reliance Jio service launched shattered their plan as Vodafone clearly understand the impact of Jio tariff plan on their potential IPO offer price. There are lots of apprehension in the market place about incumbent like Airtel,Vodafone or Ideacellular to ward off Reliance Jio competition.

Recently Airtel announced that they will invest around $9Bn to upgrade their network and Idea Cellular will definitely get the support from the promoters in the form of equity infusion or loan to go full fledged against Reliance Jio with aggressive price point.

As per the news reports Reliance Jio initiated call drops are on the rise as incumbent has to provide more PoI and that will take few weeks to be in place. Its universal truth that Reliance group of companies most of the time use their petro finance to suppress competitor and sometime throw them out of the market.

In case of Indian Telecom market place, Reliance Jio is going to face stiff competition from incumbent operator the way new entrant faced in 2012-2013 time frame. By embarking $3Bn fund Vodafone sent out clear signal to industry player that they will be very aggressive in acquiring required spectrum to cover all 4G circle. We should not forget that Vodafone Plc the parent of Vodafone India is pioneer in 4G network know how and time to time support Indian operation.

It is also expected that once the concurrent userbase increases on Reliance Jio network then their partner from ccc will face music to cater the traffic and there might be problem in scenario 1 when the content hosted at partners end. On the other side, if content is hosted at Reliance Jio data center then it will be incremental streaming cost for Reliance Jio

The intention of Vodafone India is very straight and clear that Reliance Jio should struggle with one or another problem till the time Reliance Jio launches their service commercially. All are expecting that post commercial launch Churn rate at Reliance Jio will be maximum given their past experience.

At one end Reliance Jio is also raising 15K  Crore whereas the competitors like Airtel and Vodafone is also showing their financial muscle and it will be interesting game moving forward but will dent Reliance Jio more than anyone else.

Share this

Visionary Leader with 22 years of multi-functional experience - combine astute tactical, strategic, business, technology and industry skills in ICT domain at domestic and international level (Wired/Wireless/ networks /platforms/ connected device) .... More

Related Posts

Next Post »