Vodafone anticipates telecom revenue drop due to JioPhone launch, seeks DoT relief

By Digit NewsDesk | Published on Aug 16 2017
Vodafone anticipates telecom revenue drop due to JioPhone launch, seeks DoT relief

Vodafone is already recording declining revenues and says India’s entire telecom industry will suffer due to the "effectively free' JioPhone.

Make your home smarter than the average home

Make your life smarter, simpler, and more convenient with IoT enabled TVs, speakers, fans, bulbs, locks and more.

Click here to know more

The JioPhone, recently announced by Reliance Jio, has not even hit the shelves yet and Vodafone has written to the Department of Telecommunications (DoT) warning of a possible revenue decline in the telecom industry due to the feature phone which promises free calls, data and text messages.

As per an ET report, Vodafone wrote a letter to the telecom department's secretary and member finance saying, “The new operator continues to aggressively under-price its services, including announcing launch of 'Effective Zero Price Feature Phone' with unlimited voice. This is likely to cause further erosion in revenue for existing operators.”

The telco also noted that its adjusted gross revenue from services has been witnessing a continual drop, recording a sequential decline of 3.41 percent in the quarter ended June, 2017. Vodafone has also requested the DoT to lower Universal Service Obligation (USOF) levy from 5 percent to 3 percent, alongside a reduction in interests and rescheduling payments for spectrum to ease the pressure on incumbent telecom operators.

As per the report, Vodafone’s proposals have already been submitted to an Interministerial Group (IMG) which is supposed to meet on August 16,17 to discuss the financial state of the country’s telecom operators. The report further mentions that the IMG is split in its decision of offering relief to the telecom companie as some feel “green shoots” of recovery can be seen in the sector.

Pre-bookings for the JioPhone are set to begin on August 24, but offline pre-bookings have already begun. The phone will be “effectively free” with a one-time security deposit of Rs 1,500, which will be refundable on return of the device after three years. The launch of the device is bound to attract feature phone users in India, just like Jio's free data and calling services did when the telco first launched in the country.

Besides the feature phone, Jio's ballooning subscriber base also poses a threat to other telecom operators. Reliance Jio recorded 123.36 million subscribers at the end of June and the launch of the JioPhone is expected to help the telco add more subscribers in coming months.


JioPhone   Demo  Features  Digitin
Digit NewsDesk

The guy who answered the question 'What are you doing?' with 'Nothing'.

Digit caters to the largest community of tech buyers, users and enthusiasts in India. The all new Digit in continues the legacy of Thinkdigit.com as one of the largest portals in India committed to technology users and buyers. Digit is also one of the most trusted names when it comes to technology reviews and buying advice and is home to the Digit Test Lab, India's most proficient center for testing and reviewing technology products.

We are about leadership-the 9.9 kind! Building a leading media company out of India.And,grooming new leaders for this promising industry.