Jio's low-cost 4G phone beats rivals Airtel, Voda Idea in non-metro circles

Jio's adjusted gross revenue share went up by 7 percentage points in Q2FY18-19 over the previous quarter in the circles of the C category

Reliance Jio’s launch of a low-cost 4G feature phone in July seems to have paid rich dividends, with the telco wresting substantial market shares from its key rivals Airtel and Vodafone-Idea in non-metro circles.

According to the data released by the Telecom Regulatory Authority of India (Trai) for the quarter ended September, Jio’s adjusted gross revenue (AGR, excluding national long-distance revenues) share went up by 7 percentage points in Q2FY18-19 over the previous quarter in the circles of the C category. The figures for the circles in the B and A categ­ories are 6 and 3.4 percentage points.

On the other hand, Vodafone-Idea, for instance, got a hammering in the C category, losing over 8 percentage points, and also in the B and A categories, though by lower margins. Even Airtel had to give ground to Jio, but for it the good news was that it was able to wrest revenue share from Jio in metros. Airtel’s share went up by 3 perce­ntage points while its rival lost marginally by 1.4 percentage points.

Jio in the September quarter is top of the charts in 12 of the 14 circles in the B and C categories, including Haryana, Punjab, Uttar Pradesh east and west, Madhya Pradesh, West Bengal, Bihar, Assam and Kerala. Even in the A category circles, it has become number two in four of the five circles, including Karnataka, Maharashtra and Andhra Pradesh.

The phone was aimed primarily at egging on 2G players to move to the data world without having to make a substantial investment in a smartphone. With an incremental increase in the number of subscribers, ranging from 9 million to 11 million a month, 5 million of those are those who have subsc­ribed to the 4G feature phone. Under the offer, customers have to pay Rs 1,095 for the package, which includes the phone for Rs 500 (the money is returned in three years, so it is effectively free) in exchange for an old phone. It comes loaded with six months’ data and an unlimited voice package (for which one pays Rs 594) and 0.5 GB every day, apart from freebies such as SMS.

The offer, analysts say, has done two things: It has hiked the average revenue per user at the lower end of the market as consu­mers effectively pay around Rs 99 per month for the next six months for the service. Earlier they were recha­rging pho­nes at Rs 10 a month or trying the Rs 49 offer from Jio for limited data. Jio now has the largest share of AGR (without NLD revenues) at 33.7 per cent, followed by Vodafone-Idea at 30.6 per cent and Airtel at 27.4 per cent.

Telcos, however, point out the key question is whether these subscribers will continue to take the same package after the six-month period is over. But rivals point out Jio is merely subsidising the phone heavily to acquire revenue customers.