The telecom industry has lost about 20 percent of revenue due to Reliance Jio's free services, India Ratings and Research has said, revising the sectoral outlook for 2017-18 to negative.
India Ratings and Research (Ind-Ra), a Fitch group company, said the revision of outlook on the sector to negative for 2017-18 from stable-to-negative for 2016-17 is due to "increasing competition".
The report further said the industry has lost about 20% revenues due to the free services by RJio.
Despite the higher volumes, decline in data tariffs will pull down the average revenue per user (ARPU) while voice revenue remains at risk due to RJio's declared voice pricing strategy.
A decline in data tariffs by 20-30 percent will pull down average revenue per user (by 10 percent, despite higher volumes due to a rise in data usage),
Reliance Jio launched full-fledged mobile services on 5 September 2016, offering consumers free voice and data.
Just days before the 90-day inaugural welcome plan ended on 3 December, Jio announced extension of the freebies for existing and new customers under the 'Happy New Year offer'.
The incumbent operators have alleged that the Jio's free offer is hurting the industry.
Bharti Airtel has reported its lowest profit in four years in the third quarter of 2016-17 as demonetisation and intense competition from Reliance Jio hit revenues.
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)