Financial Performance on Reliance vs Idea

Abstract

Telecommunication sector in India is the second largest in the whole global economy, with over 1.2 billion subscribers. Due to high population, Indian telecom industry has been very competitive, with many brands being operating in the market. Due to challenging business environment many exited the market. And in today’s scenario only handful of companies are operating which are Airtel, Reliance Jio, BSNL, Idea and many others. Among the following Reliance Jio being the strongest and the most emerging player in the market, came into competition on 5th September 2016.The strategy which helped Reliance Jio capture the maximum market share was free internet service to Jio prime customers which compelled its rivals to lower the data rates. Upon its launch Reliance welcome Offer was introduced where 4GB data was provided to customers on daily basis. And there were many add-on features which made JIO data package favourable for customers of all age and cadre. This all had an impact on the other players in the Indian telecom market, with other telecos’ facing a sharp drop in their monthly average revenue per user, which was approximately 42%; this being also called “The JIO effect”. Coming on, there were two major telecommunication companies, Vodafone and Idea whose business was grossly affected and therefore these collaborated to face this Jio effect. These got merged on 31st August 2018 to form Vodafone Idea Ltd. in order to fight this neck to neck battle with Reliance Jio.