The financial stress in the telecom sector has forced Department of Telecom (DOT) to express its inability to meet this year targets.
According to the report in HBL, for 2017-18, the Finance Ministry has set a target of ₹47,304 crore for the telecom department but now DoT wants this revised down to ₹29,524 crore.
DOT also pointed out that from the last three-quarters revenues of telcos have been falling.
To recall, Mukesh Ambani-owned Reliance Jio has already shaken the market and now whole telecom industry is sitting on a huge debt.
Jio’s aggressive plans have forced others players to cut voice and data tariff.
Cellular Operators Association of India (COAI), Director-General, Rajan S Mathews on the financial health of the telecom industry told Gizbot that the telecom industry has lost about 20 to 30 percent of revenue due to Reliance Jio’s free services.
Earlier, before Jio came into the game there were losses but year on year revenue was increasing.
Rajan also pointed out that 2016- 17 was the first year in the history of telecom industry that total revenue of the industry has declined.
When asked about, whether Jio was the reason behind losses, Rajan replied free “offers by one company is the principal reason behind it.”
India Ratings and Research (IndRa) firm also said that Indian telecom industry has lost around 20 percent revenues due to free services being offered by Reliance Jio.
It says, smaller telcos may not be able to sustain cash burn by operating independently and are looking for exit options.