The JioPhone, recently announced by Reliance Jio, has not even hit the shelves yet and Vodafone has written to the Department of Telecommunications (DoT) warning of a possible revenue decline in the telecom industry due to the feature phone which promises free calls, data and text messages.
As per media report, Vodafone wrote a letter to the telecom department’s secretary and member finance saying, “The new operator continues to aggressively under-price its services, including announcing launch of ‘Effective Zero Price Feature Phone’ with unlimited voice. This is likely to cause further erosion in revenue for existing operators.”
The telco also noted that its adjusted gross revenue from services has been witnessing a continual drop, recording a sequential decline of 3.41 percent in the quarter ended June, 2017. Vodafone has also requested the DoT to lower Universal Service Obligation (USOF) levy from 5 percent to 3 percent, alongside a reduction in interests and rescheduling payments for spectrum to ease the pressure on incumbent telecom operators.
As per the report, Vodafone’s proposals have already been submitted to an Interministerial Group (IMG) which is supposed to meet on August 16,17 to discuss the financial state of the country’s telecom operators. The report further mentions that the IMG is split in its decision of offering relief to the telecom companies as some feel “green shoots” of recovery can be seen in the sector.
By Baishakhi Dutta
