Reliance Communications which witnessed disappointing Q2 financial results foresees a scenario where the competition will further intensify and eventually lead to consolidation in the industry.
"This (entry of new players) has led to heightened competitive activity and build-up of over-supply in the industry leading to significant tariff rationalization. We believe that in the near term such competitive activity will only increase and the overhang of these developments over the next few quarters will accelerate the process of industry consolidation in the next 18-24 months," said RCom group managing director, Satish Seth.
The company also revealed plans to introduce the now popular per second billing. "Per second billing is another option that we have evaluated internally. While ‘Simply Reliance’ is delivering positive traction for us at present, we are keeping all our options open," added Satish Seth.
The company attributed the drop in margins for Q2 to increased network and operational costs following its nationwide GSM roll-out, intense competitive activity in the market place, build up of excess capacity and aggressive nationwide tariff restructuring in the industry. |