In the recently hosted JP Morgan Conference, Reliance Communications has said that there is no slowdown and Subscriber addition momentum has remained unaffected and the company expects usage to increase as Indian companies trim travel and ask employees to use more mobile communication. GSM roll-out plan on track with possible introduction of free minutes to gain market share. This will definitely put pressure on RCom’s profitability.
RCOM expects to launch in GSM before end-FY09. RCom’s strategy to gain market share is – encashing on its existing brand name [Good or Bad Name ? Consumers will decide] Products with Bundled Offer and Discounted / Free Minutes.
Idea Cellular in a similar call last week said, subscriber addition momentum is unaffected. Margins will be hurt as the company starts operations in newer circles and cash position is sound for CAPEX except that itm ay have to rely on external borrowings for 3g Auctions.
Idea Cellular views competitive threats as manageable with RCOM GSM launch being the joker in the pack.