The BSE Telecom Index fell 2.35% on Tuesday after Mukesh Ambani-led Reliance Jio Infocomm extended a slew of promotional offers in a bid to retain its existing customers.
The BSE Telecom Index fell 2.35% on Tuesday after Mukesh Ambani-led Reliance Jio Infocomm extended a slew of promotional offers in a bid to retain its existing customers. Bharti Airtel’s stock was the worst hit, falling more than 3% before closing the session at R362.95. The stock constitutes more than half of the BSE Telecom Index. For the nine months ended December 2016, Bharti Airtel posted a profit of R3426.40 crore, a decline of 28% year-on-year. Airtel’s loss also affected its group company, Bharti Infratel, whose share prices ended 4.26% down at R295.60.
Shares of Idea Cellular also fell 0.4% and closed the session at R108.3. In the quarter ended December 2016, Idea reported its first group loss in about a decade as price cuts dented revenue.
RJio’s entry has forced other telecom players to cut prices and expand their broadband networks to retain customers. Last month, Vodafone India and Idea said that they were in talks to combine their Indian businesses.
However, Reliance Communications rose 2% and ended Tuesday’s session at R35.30. Reliance has initiated merger talks with Tata TeleServices. Tata Teleservices’ shares also rose 2.5%.
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Ambani on Tuesday said customers who adopt Jio before March 31 will have the option of signing up for a scheme called Jio Prime at R100. Customers who have enrolled for Jio Prime scheme will continue to use existing unlimited services for a year, for a monthly charge of R303.
Ambani further said that RJio will provide 20% more data than what other operators provide.
RJio, which started operations in September 2016 by offering free voice calls for life and free data for a period till March 31, 2017, has so far added 100 million users.