Jio launch to ring in consolidation, says Sunil Mittal

Moneycontrol BureauIn a freewheeling interview given to Business Standard, Founder & Chairman of Bharti Enterprises Sunil Mittal admitted that Mukesh Ambani's ambitious Jio launch will result in a shake-up in the sector. Smaller players will struggle to cope with the onslaught, he said. Given Jio's free voice services and dirt-cheap data offerings, Mittal warned, a consolidation, on a scale not seen before, is around the corner. The disruption, he said, was long overdue.He, however, dismissed threats to Bharti's own market share from Jio's entry. Bharti's aspiration, he maintained, would be to increase and 'not yield market share'.Although Jio's tariffs plans were on expected lines, Mittal admits, adding voice into the mix and making it free was unexpected. Giving Jio's data-push a big thumbs-up, Mittal said that making things free can't be considered 'innovation.' He emphasised that what Jio has done is offer smart new packaging for the lower-end packs. But Bharti was the first on the scene with 4G market, he said, having launched its first 4G network in 2012. Emphasising how Bharti is across technologies (2G and 3G) Mittal said Jio has only the 4G business. "They have to play this market very aggressively," he said.Mittal is hopeful absolute returns won't go down for telcos as people will consume more data eventually. For Ambani's plan to achieve double-digit returns on capital employed, he will require a revenue pool of at least Rs 30,000-35,000 crore, said Mittal, quoting analysts.Regarding the recent spat over points of interconnect not being offered to Jio, Mittal said there may be some initial glitches, but they will get sorted. He dismissed as 'hype' talks surrounding customers' inability to port to Jio.Largely praising Reliance Industries' Chairman, Mittal said Jio has done more to market Digital India than anybody else. He gave credit to Ambani for 'having the audacity to start a ground-up operation." As for Mittal, he is back in the familiar mold of a risk-taker, thanks to Jio.(Disclosure: RIL, which owns Reliance Jio, also owns Network18 and moneycontrol.com).