In recent years two sectors which were really profitable and source of employment had lost the charm are telecom and aviation. India was the place where new players were interested in these two sectors. While in Telecom entry of RJIO and cut throught competition has not only killed number of telecom companies but also eat up the jobs in the sector. Although in the aviation sector various factors are responsible for the low margins, competition to provide cheap services to customers is one of the reason. On the other hand sharp rise in crude oil prices also also affected balance sheets of the airlines.
On the other hand telecom sector is not affected by international factors rather it is stressed only because of the pressure to provide cheap services after the entry of RJIO which is having a business model different from all other telecom players. It is interesting to note that RJIO is venture of reliance industry owned by Mukesh Ambani, who has diversified businesses and RJIO is like a catalyst to other sectors in which Mukesh Ambani has invested like e-commerce, AJIO.COM and media company Network18 , Reliance trends, JIO TV, JIO money ,Reliance retail .
All other telecom players are only dependent on the income from there telecom business while Mukesh Ambani led Reliance industries has bucket full of businesses. This is the one of reason RJIO subsidized JIO mobile phones witch RJIO distributed at throwaway prices of Rs. 500 only.
While two major airlines, Kingfisher and Jet airways has to close their businesses in India in Telecom sectors many operators has to shut their business an two big operators VODAFONE and IDEA has to merge their business for survival .
Although rest of the players in aviation sector are doing their business smoothly this is not the case in the telecom sector .Here except RJIO All the other operators are making losses and budened with large amount of bank loans thus affectiong their investment in the sector in new technology . Earlier Government was claiming that India will launch 5G with other countries in the world , the poor balance sheets of Indian telecom players definitely won't allow them to go for 5G Spectrum bid .
Recently news broke out in India that Vodafone may exit telecom market in India due to critical financial condition .As soon as Government noticed this,announce relaxation for two years to pay due AGR to DOT.
Two improve balance sheets already telecom operators has declared to raise the tariffs from December 19.It may assumed that the tariff war in the telecom sector is over and consumers has to pay extra bucks for telecom services in coming days. Now on wards it will be interesting to see the change in business model by telecom operators to stay in market against RJIO which has already taken a leap while establishing world class notwork ,to planning next generation network with IOT and Artificial intelligence. RJIO is also focusing on producing its own content like Netflix and Amazon prime. It will interesting to see can Netflix and Amazon prime will face the similar heat like other telecom player felt with the entry of RJIO in the market.
Although the competition is high in aviation sector but the potential to grow business is very high, as Government is looking to connect small cities with flights and opening new airports with investment from private companies. With large scale of inland routes their is very much potential in India.
Although last few years were very disappointing for old telecim players due decreasing revenue, ARPU from customers has started to increase by implementing fixed minimum monthly recharge. Recent judgement from Supreme Court regarding payment of due AGR by operators has further hit balance sheets of the companies, although Government provided partial relief by extending the deadline for two years. Vodafone- Idea has announced to raise the tariffs by 42 %from 3rd December, followed Airtel and Rjio.
Although it seems an end to price war in Telecom but Rjio has again shown its intention to enter into fierce competition in fixed wireline broadband or FTTH. Rjio already launched its ftth back in September but not got good response. To achieve its target customers Rjio recently launched low cost ftth with starting price of 349 and 300 GB data at a speed of 10 Mbps, thus it became cheapest ffth service avilable in the market.
Definity BSNL will also the tariffs because of its decreasing revenue and accumulated losses. Now it is interesting to see how Government will stop operators to raise tariffs further in future, as Government was of the view that telecom services should be cheap when Rjio started telecom services at throwaway prices.
Future of Aviation sector in India
Although the competition is high in aviation sector but the potential to grow business is very high, as Government is looking to connect small cities with flights and opening new airports with investment from private companies. With large scale of inland routes their is very much potential in India.
Future of telecom in India
Although last few years were very disappointing for old telecim players due decreasing revenue, ARPU from customers has started to increase by implementing fixed minimum monthly recharge. Recent judgement from Supreme Court regarding payment of due AGR by operators has further hit balance sheets of the companies, although Government provided partial relief by extending the deadline for two years. Vodafone- Idea has announced to raise the tariffs by 42 %from 3rd December, followed Airtel and Rjio.
Although it seems an end to price war in Telecom but Rjio has again shown its intention to enter into fierce competition in fixed wireline broadband or FTTH. Rjio already launched its ftth back in September but not got good response. To achieve its target customers Rjio recently launched low cost ftth with starting price of 349 and 300 GB data at a speed of 10 Mbps, thus it became cheapest ffth service avilable in the market.
Definity BSNL will also the tariffs because of its decreasing revenue and accumulated losses. Now it is interesting to see how Government will stop operators to raise tariffs further in future, as Government was of the view that telecom services should be cheap when Rjio started telecom services at throwaway prices.
