Reliance Jio's free services cost them Rs 22.5 crore
Reliance Jio has garnered 10.89 crore paid subscribers till March 31 but losses on account of free services widened for the company.
The newcomer has recorded net loss of Rs 22.5 crore which was higher than a year ago at Rs 7.46 crore.
Reliance Industries Ltd (RIL) that owns Reliance Jio Infocomm, declared its results on Monday and announced a profit after tax was higher by 16.6% at Rs 8,046 crore ($1.2 billion) as against Rs 6,903 crore in the corresponding period of the previous year.
Total income of the company’s telecom wing dropped to Rs 54 lakh as against Rs 2.25 crore for the six month period from October to March.
According to a report by Economic Times, Jio said its revenue fell by 76% and total expenses for the same period mounted to Rs 34.88 crore from Rs 13.63 crore a year ago.
The company which launched with its 'Welcome offer' in September offered subscribers free services for a period of three months. The free offers kept rolling in by the company right up till March 31, 2017.
“The price war for data subscribers has dented the bottom lines of wireless telecom service providers, yet none of them is likely to pull a punch,” CRISIL analysts Ajay Srinivasan and Hetal Gandhi said in a report dated April 24.
The company has recently rolled out its Jio Dhan Dhana Dhan offer along with others which provided 84 GB data for 84 days at Rs 309 and 168GB data for 84 days at Rs 509.
After this many other telco companies like Airtel, Idea, Vodafone and BSNL have also launched free services with price plans ranging in the similar bracket.
“…the price war in the Rs 1.5 lakh crore wireless telecom market will continue in this fiscal, too, leaving bruised bottom lines,” the CRISIL report said.
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