Monday, October 7

Reliance Jio’s Growth May Trouble Its Competitors

Mukesh Ambani-owned Reliance Jio Infocomm has reported a considerable growth in profits in the March-ended financial year. Reliance Jio saw a net profit of Rs 510 crore in the quarter ended March compared with Rs 504 crore in the previous three months. Jio’s operating revenue increased 3.6 percent reaching to Rs 7,128 crore.

The older telecom operators in India like Bharti Airtel and Vodafone India have been growing from the very beginning but since Jio has entered the league, they have been facing a tougher competition.

“When the dust settles down and subscribers from beleaguered smaller players have been mopped by the Big Three (Vodafone-Idea combine, Airtel and Jio), the tussle for supremacy will resume,” said Sandip Das, senior advisor at telecom consulting firm Analysys Mason. “With Jio’s ambitions to lead, the market will continue to see aggressive moves,” he said.

It is easily noticeable how the market of Jio grew when it was launched in the market in September 2016. Their reasonable plans and high speed were the main reason for the attraction of customers. Subscribers moved from other existing smaller telecom servers to the four larger players, mainly to Jio, at a high pace. And due to this the total subscriber base of the remaining telecom servers declined to 258.7 million as of March 2018 against 383.4 million as of March 2017.

Talking about the customer market share stats, Airtel’s customer market share has increased to 25.7% in March this year from 24.3% in October 2016. On the other hand, Vodafone’s customer share went up to 18.8% from 18.7% during the same time period, and Idea’s market share rose to 17.9% from 17.2%. And now, Jio holds a market share of 15.8% as of March this year, which previously was 3.3% in October 2016.

“The situation appears even stark when seen in terms of active subscribers. The top four telcos hold 902.3 million active subscribers, or 90.4% market share. This has increased significantly from 73% as on March 2017, indicating gradual waning away of the existing telcos,” said ICRA. 

With user additions from existing companies coming to an end, old telecom companies may find it difficult to cope up with the growing success and revenue of Reliance Jio. The battle is tough and it is expected to get tougher in the near future.