Reliance Jio has become the country’s third largest mobile operator by revenue. However, despite the stunning performance by the latest entrant, others were not far behind.
According to data for the March quarter of FY18 shared by Telecom Regulatory Authority of India (Trai), the market share of Bharti Airtel, Vodafone and Idea expanded and remained comfortably ahead of Jio.
Jio, however, benefitted from the falling revenue of the fringe players.
Owing to intense competition and low tariffs, revenues of the telecom industry continued to decline.
According to a report by UBS, the telecom industry’s adjusted gross revenue (AGR) continued its downward movement and declined 7.3 per cent quarter-on-quarter basis. This slide was led by price cuts in January, reduction in international termination rates and consolidation of revenue by the large players.
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Goldman Sachs said Airtel’s revenue market share increased to 32.2 per cent in March 2018 quarter from 31.2 per cent in the December 2017 quarter. Similarly, Vodafone Idea’s combine share increased to 38 per cent from 37.3 per cent. Reliance Jio’s share increased to 20.1 per cent from 15.6 per cent. As expected, the losers were the small players who either exited the sector or merged with the bigger players. The revenue market share of other smaller telcos decreased to 9.7 per cent at the end of March 2018 quarter as compared to 15.9 per cent in the December 2017 quarter.
“With the tariff environment largely stable for the last few months, we expect revenues for incumbents to stabilise in 1Q19, also aided by the rapid conversion of subscribers to data. We reiterate our buy on Bharti (Airtel) as we believe the company has the ability (given its strong network footprint and balance sheet) to defend its market share and register profits as and when the tariff environment starts improving,” Goldman Sachs said.
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According to analysts, revenues of the telecom industry are down by $7 billion annually since the launch of services by Reliance Jio in September 2016. However, with most smaller telcos now having exited the market, the industry revenues are expected to largely bottom out at current levels.