Extension of Reliance Jio sops is another nightmare for rival telcos

Reliance Jio has been giving sleepless nights to the leading telecom companies of India ever since its inception, courtesy its initial attractive offers and negligible charges once the offer ended on March 31st.

However, the telco has decided to extend the subscriptions deadline to April 15th, while also waiving the monthly recharges for three months for subscribers who register within that timeline.

The news of this decision has proved to be another nighmare for India's top three telcos - Bharti Airtel, Vodafone India and Idea Cellular, denting both their customer base and revenue.

Also read: Airtel, Vodafone India and Idea’s plea against Reliance Jio is going to fall flat. Here’s why

There could be sharp decline in Ebitda (earnings before interest, taxes, depreciation & amortisation) levels in the coming four quarters, say industry experts. Ebitda is a major financial performance metric, which indicates company's ability to service debt.

Also read: Cleartrip Survey Reveals that Reliance Jio is Spearheading the Mobile Data Usage Trend

As per JM Financial, the extent of sequential Ebitda decline for marker leading telcos in first and second quarters of FY18 "could turn out higher" than what had been predicted. "We do not expect Bharti and Idea share prices to outperform, until clear visibility emerges on revenue/Ebitda recovery from Q3," it told ET.

It was on Friday that Jio had announced its 'Summer Surprise' offer, under which Prime members would get complimentary services till end-June.

(Image source Telecom Talk)