Sunil Mittal, chairman of India's biggest telecom operator Bharti Airtel Ltd, said that his company is prepared to face the competition that may arise after the launch of 4G services by Reliance Jio, a telecom arm of Mukesh Ambani's Reliance Industries.
Reliance Jio is expected to come out with "competitive pricing" to gain customers at a faster pace, which could pressurise the profit margins of other players like Bharti Airtel, Idea Cellular and Vodafone India.
"Should we be concerned about Jio? I think we should be about all kinds of competition, be it Vodafone, Idea or Jio and yes, when Jio is coming in, one has to take it up very seriously," said Mittal.
Ambani's Jio was reported to have been aiming to acquire 100 million subscribers in the first year of its launch.
"Let me say we are prepared to face the onslaught. We have a large pool of airwaves across bands. We have a very extensive network now... Airtel has committed.'16,000 crore this year, the largest capex ever," he said in an interview to The Economic Times.
Reliance Jio has recently delayed the launch of its 4G services to next fiscal year. Earlier, it had planned to roll out services by December, this year.
Mittal also said the Reliance Jio's launch is already resulting in consolidation in the domestic telecom sector and the number of players in the sector could finally be reduced to five or six.
These operators are likely to be "Bharti Airtel, Vodafone, Jio, Idea Cellular, BSNL/MTNL and at best one more operator, possibly arising out of a merger of some smaller telcos as the sixth possibility," he said.
Earlier this month, Bharti Airtel had said that it would spend Rs 60,000 crore ($8.98 billion) to upgrade its mobile voice and data network over the next three years in the face of the impending launch of Reliance Jio.
"By March, Airtel would have deployed 70,000 base stations (BTS), which is once again the largest-ever deployment anywhere outside China," Mittal said. "This translates into 6,000 BTS a month. Fibre digging is going on, device tie-ups are underway."
However, a global brokerage firm CLSA in a recent report said that Reliance Jio could face problems in gaining subscribers due to low average revenue per user (ARPU) and acceptance of 4G/VoLTE handsets even though it is expected to launch its 4G services at cheaper prices.
