Reliance Jio is it bad for the Indian economyReliance Jio is hugely popular with the common man.
In the last week of September, Telecom Regulatory Authority of India, TRAI has reduced the interconnect usage charge (IUC) from 14 paise to 6 paise applied by the telecoms. The companies stand to loose Rs2250 crores in 3 months.
The new Reliance Jio 4G phone is apparently 40% subsidized. In Karnataka alone, the 6 competitors have lost 22.36% of their earnings. Aircel has lost nearly 52% of their earnings.
Jio has basically snatched the cake from its rivals. It has managed to capture the market and eat into the profits of its competitors.
Not being an expert by any shot, I can see that the telecom operators have taken us for a ride and made huge profits in the past. Will have at least now give back some of their earnings to the customers that have been loyal to their companies by not switching to reliance jio.
In the long run, I can see job cuts, salary cuts, shutting down of smaller units of the suffering companies, impact on the share prices. Ultimately does it mean that we pay back indirectly later on for the freebies given by the Jio.