Reliance Jio Costs Rival Telecom Operators Rs 7,200 Crore
Three telecom companies revenue market share increased by 340 bps.
Reliance Jio Infocomm Ltd.’s free blitz cost the Indian telecom sector more than Rs 7,000 crore.
The telecom industry saw its revenue decline 5 percent in the last financial year, the first time ever, data released by the Telecom Regulatory Authority of India (TRAI) showed.
The revenue of Bharti Airtel Ltd. and Idea Cellular Ltd. grew in the half year ended September last year, but fell in the following six months after Reliance Jio launched services, according to Bloomberg data. Vodafone India’s service revenue also rose in six months ended September, but fell for the year ended March, according to its financial statement.
The country’s newest telecom service provider offered free data and voice services for seven months, before it start charging from April this year. Reliance Jio’s entry forced incumbents to either ramp up their offerings at cheaper rates, or lose subscribers, leading to a rise in the top three telecom companies’ market share.
Bharti Airtel, Vodafone India Ltd. and Idea Cellular collectively control 81 percent of the revenue market share, gaining 340 basis points in fourth quarter of financial year 2017.
However, in absolute terms, the adjusted gross revenue of the top three companies fell by 10 percent to Rs 24,100 crore. It fell 14 percent to Rs 29,900 crore for the industry.
Among the top three telecom companies, Airtel gained the most as its market share rose by 160 basis points to 34.9 percent. Idea Cellular ranked second with a 140 basis-point jump in its share.
While the top operators managed to grow market share, the real gain or decline would be visible only after Mukesh Ambani’s telecom unit starts reporting its revenue.