The leading mobile group of India- Vodafone faced toughest
competition from the Reliance group, soon after the launch of Reliance
Jio in the market. Not only Vodafone, but all the major mobile and data
service provider of the nation have suffered losses after the
introduction of Reliance Jio in the Indian market. Vodafone has racked
$5 billion in losses in the first half. This latest Indian Business News
is, Vodafone’s loss after paying income tax rose to 5.1 billion euros
in the last six months as compared to the net loss of 2.5 billion euros
in one year earlier. The Vodafone group said that increased losses in
the past six months are due to increased competition in the Indian
market.
The competition and pressure has increased ever since
the launch of commercial operations by Mukesh Ambani. Since Reliance Jio
has been offering cheap data and free voice services, which has led
other Telecom companies to cut their costs and this is the main reason
why mobile companies are facing huge losses. The pricing strategy of Jio
is leading other mobile companies to put their market shares at risk.
This will definitely have impact on the profitability in the long term,
said Rishi Tejpal- analyst at Gartner Inc.
Chief executive at
Vodafone- Vittorio Colao said that competition has increased in the
recent year, which has also reduced revenue growth and profitability.
The stiff competition between the mobile companies is making other
companies reduce their data and voice plans, which is why they are
facing huge losses. The chairman of Vodafone also said that they will
continue with IPO of Vodafone India as soon as market conditions returns
to normal. Vodafone has 4G presence in 9/22 telecom circles in India.
Let’s
wish the market trends and conditions in the telecom industry returns
to normal so that all the telecom companies can have a sigh of relief.
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