Bharti Airtel, Idea Cellular and Reliance Communications slumped and wiped off their total market capitalisation by over Rs 16,000 after Reliance Industries Chairman Mukesh Ambani said the Reliance Jio would make all domestic voice calls and roaming free and that data would be priced below its competitors.
Market capitalisation of telecom companies like Bharti Airtel, Idea Cellular and Reliance Communications slumped by Rs 13,165 cr after Reliance Industries Chairman Mukesh Ambani announced the launch of Reliance Jio and said that would offer free domestic voice calls and roaming. He further added that data would be priced below its competitors. Reliance Jio services, which will be commercially launched on September 5, 2016, is likely to impact the business of already established players like Bharti Airtel, Idea Cellular, Vodafone and Reliance Communications.
Bharti Airtel shares slipped 6.37 per cent wiping off market cap of Rs 8,454.50 cr, while Idea Cellular shares dropped 10.48 per cent eroding market cap of Rs 3,528 cr. Reliance Communication slumped as much as 8.81 per cent wiping off market cap of Rs 1182.26 cr.
At the company’s 42nd annual general meeting (AGM)on Thursday, Mukesh Ambani announced a ‘free welcome offer’ for Jio customers from September 5 till December 31. Reliance Jio will offer users data services free for four months, after which it will offer 10 tariff plans starting at Rs 19 a day for occasional users, Rs 149 a month for low data users and Rs 4,999 a month for heavy data users.
G Chokkalingam, Equinomics Research and Advisory, said that Reliance Jio launch will bring in competition for the telecom companies on tariffs.