Telecom war heats up: Reliance Jio takes a jibe at rivals, says ‘antique business models’ will not survive

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Published: March 23, 2018 5:07:01 PM

Even as Mukesh Ambani-run telecom venture has emerged as a major disruptor in the telecom space, Mathew Oommen, President of Reliance Jio says that the telcos with antique business models will perish.

reliance, reliance jio, reliance communication, supreme court, reliance industries, mukesh ambani, status quo, Rcom asset sale“If you have antiquated technology and antiquated business models and you have high inefficiencies, then your cost of doing business will get disrupted,” said Mathews of Reliance Jio Infocomm.

Even as Mukesh Ambani-run telecom venture has emerged as a major disruptor in the telecom space, Mathew Oommen, President of Reliance Jio says that the telcos with antique business models will perish. Speaking at a media event, Mathew Oommen said, “If you have antiquated technology and antiquated business models and you have high inefficiencies, then your cost of doing business will get disrupted.”

Even as Jio gets bigger, adding more than 80 million subscribers in the month, it has faced accusations of lower tariffs leading to a price war in the industry. In his address, Oommen Mathews said that India has much lower tariffs than other developed countries such as the US. Mathews highlighted that India TRAI and the government cannot save the day for the operators. We have very rational tariffs.

Various other parameters also matter, than just tariffs he pointed out. Mathews says that telcos will have to look at improvising on their models.  In response, Bharti Airtel said that the government cannot turn a blind eye to the industry’s troubles. The success of the industry is due to own efforts and policies, the company said.

Interestingly, after its disruptive entry into the telecom industry less than one year ago, Reliance Jio has forced the industry to consolidate by offering 4G data at cheap prices, and providing low-cost voice calls. Reacting to the disruption in the industry Sunil Bharti Mittal said that Airtel had survived free data calls for a nine-month period from the ‘new’ player. He points out that India has a very high consumption of data.

“The consumption is high given the low pricing. People are guzzling entertainment, videos, live TV and what not, that puts a lot of pressure on the network,” Sunil Mittal said. At a recent event, responding to a question on the low speed Sunil Mittal said that as data tariffs rationalise, the speeds will improve.

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