Is Reliance Jio already the second largest telecom firm in India?
Techenonik
Trai’s March quarter financial report puts Reliance Jio’s adjusted gross revenue at Rs 6,218 crore—22% higher than Vodafone India and only 12% lower than Airtel
Revenue of incumbents Airtel, Idea Cellular and Vodafone have fallen by over a third since Reliance Jio launched services in mid-2016; that of small companies has fallen as much as 85%. Photo: Aniruddha Chowdhury/Mint
The Telecom Regulatory Authority of India’s (Trai’s) financial report for the March quarter puts Reliance Jio Infocomm Ltd’s adjusted gross revenue (AGR) at Rs 6,218 crore. This is about 22% higher than Vodafone India Ltd’s revenue and only 12% lower than market leader Bharti Airtel Ltd’s AGR of Rs 7,087 crore.
Based on these numbers, Reliance Jio has a market share of as much as 25.6%, less than two years since its launch. Vodafone and Idea Cellular Ltd, both of whom had a head start of about two decades over Reliance Jio, had an AGR market share of 21% and 16.6%, respectively.
But apparently, the AGR figure needs to be adjusted some more to reflect true market share. The AGR reported by telcos for their various circles does not fully capture revenues subscribers pay for roaming and national long distance (NLD) calls. As such, it makes sense to add NLD revenues reported by telcos, to the extent these are used by their captive subscribers, and arrive at, if you will, adjusted AGR (AAGR).
Based on estimates of Kotak Institutional Equities, after making these adjustments, Reliance Jio’s market share stands at 20.7%. We made another adjustment to reflect revenues of Aircel Ltd, which filed for bankruptcy earlier this year and didn’t bother reporting revenues to Trai.
Based on this so-called AAGR data, Reliance Jio has a market share of 20.4%, which is not much lower than Vodafone’s 21.5%. So while the new entrant may not be No.2 yet, it isn’t far away from the mark.
While Reliance Jio has quickly grabbed a fifth of the market, its cut-throat pricing has also led to a fall of over a third in the revenue of large incumbents. Small firms’ revenues have fallen by 85%, and it’s only a matter of time before they completely disappear.
Since Reliance Jio’s launch, the overall industry size has fallen by about 30% based on the above-mentioned AAGR data. A moot question is how much lower it can go with Reliance Jio aggressively continuing to vie for a larger piece of the pie.
Based on these numbers, Reliance Jio has a market share of as much as 25.6%, less than two years since its launch. Vodafone and Idea Cellular Ltd, both of whom had a head start of about two decades over Reliance Jio, had an AGR market share of 21% and 16.6%, respectively.
But apparently, the AGR figure needs to be adjusted some more to reflect true market share. The AGR reported by telcos for their various circles does not fully capture revenues subscribers pay for roaming and national long distance (NLD) calls. As such, it makes sense to add NLD revenues reported by telcos, to the extent these are used by their captive subscribers, and arrive at, if you will, adjusted AGR (AAGR).
Based on estimates of Kotak Institutional Equities, after making these adjustments, Reliance Jio’s market share stands at 20.7%. We made another adjustment to reflect revenues of Aircel Ltd, which filed for bankruptcy earlier this year and didn’t bother reporting revenues to Trai.
Based on this so-called AAGR data, Reliance Jio has a market share of 20.4%, which is not much lower than Vodafone’s 21.5%. So while the new entrant may not be No.2 yet, it isn’t far away from the mark.
Since Reliance Jio’s launch, the overall industry size has fallen by about 30% based on the above-mentioned AAGR data. A moot question is how much lower it can go with Reliance Jio aggressively continuing to vie for a larger piece of the pie.
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