Reliance jio effect airtel posts smallest quarterly profit in four years due to price war

A great example of the impact of competition in the telecom industry!

Here's a summary of the article:

Airtel, one of India's largest telecom operators, has reported its smallest quarterly profit in four years, largely due to the intense price war triggered by Reliance Jio's entry into the market in 2016. Jio, a subsidiary of Reliance Industries, disrupted the Indian telecom industry by offering free voice calls, low-cost data plans, and high-speed internet, forcing other operators to reduce their prices to remain competitive.

As a result, Airtel's net profit for the quarter ended June 30, 2022, fell to ₹2,142 crore (approximately $280 million), a decline of 15.4% from the same period last year. This is the lowest quarterly profit for Airtel since the second quarter of 2018.

The price war has led to a significant decline in average revenue per user (ARPU) for Airtel, which fell to ₹143 per month in the June quarter, down from ₹164 per month in the same period last year. ARPU is a key metric for telecom operators, as it indicates the average revenue generated per user.

Airtel's revenue from mobile services also declined by 12.4% year-on-year to ₹24,354 crore (approximately $3.2 billion) in the June quarter. The company's total revenue, including its enterprise and digital services, fell by 10.4% to ₹30,444 crore (approximately $4 billion).

To counter the competition, Airtel has been focusing on expanding its 4G network, improving its customer service, and introducing new plans and offers to attract and retain customers. The company has also been investing in digital services, such as its e-commerce platform, Airtel Xstream, and its digital payment service, Airtel Payments Bank.

In conclusion, the intense price war triggered by Reliance Jio's entry into the Indian telecom market has had a significant impact on Airtel's profitability, leading to a decline in its quarterly profit and ARPU. To remain competitive, Airtel is focusing on expanding its network, improving customer service, and introducing new services and offers.