Indian Telecom Industry Revenue Falls 11.7 Percent, Courtesy Jio Free Services

The Indian telecom industry’s revenues dropped 11.7 percent year-on-year, and 8.5 percent sequentially due to free services by the Mukesh Ambani-led telco Reliance Jio, Jefferies said in a note. “Jio effect was also evident in decline being maximum in metro and A circles where Reliance Jio has a higher penetration, and where the smartphone ecosystem is better developed,” it added.

vivo-v-plus-3

Reliance Jio Infocomm has added 3.9 million new subscribers in the month of April, taking its overall base to 112.6 million. The telco pipped incumbent telcos Bharti Airtel, Vodafone and Idea Cellular in terms of user additions in the month, according to latest data released by the Telecom Regulatory Authority of India (TRAI).

However, Jio’s user acquisition speed has slowed down from 5.83 million users in March.

A report from Goldman Sachs said that Jio added 0.4 million active (VLR) subscribers in April, its fourth straight month of deceleration and with Jio starting to charge from April, the slowdown in subscriber additions is likely to continue in coming months as well. After becoming a paid service, the subscriber addition of Jio slowed down and it’s continuing with every passing month. And the month of April is no different as well. The net additions of Jio were 3.9 million, while active subs stand at 0.4 million.

Total 4G smartphone installed base of 131 million in India implies that Jio is penetrated into 86 percent of the devices (61 percent by active subscribers).

Jefferies further said that the higher growth from data services, the decline in voice and the lower investments made by telcos outside the top three has started showing up in a steeper decline in revenue for them.

“The Top-3 combined now have a 76 percent revenue market share in the industry. As we stressed in previous reports, this decline in smaller operators would be extrapolated to industry consolidation,” Jefferies.

“However, we think India will remain a five player market at best, with three equally strong competitors (Bharti, Voda-Idea combined, Jio) being as bad for incumbents as a fragmented market at present,” it added.

9
Leave a Reply

avatar
5 Comment threads
4 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
8 Comment authors
M SJOYAashu MalikChanduAbhishek Dutta Recent comment authors
newest oldest most voted
M S
M S

Data market was overpriced and is now going through a phase of correction which is hastened by Jio’s entry other wise the incumbent operatoes were not ready to take even 3G to the low revenue generating areas of India.

JOY
JOY

JIO free effect will come down soon on incumbents as July approaches. Summer Surprise Offer Ends soon, my Jio Summer Surprise Offer will expire by mid July.

Recent Posts

BSNL Revises Rs 98 Prepaid Plan, Now Offers 2GB Daily Data and Eros Now Subscription

After reducing the validity of two voice-only prepaid plans of Rs 99 and Rs 319, BSNL has now revised its...

GTPL Hathway Added 11,000 Broadband Subscribers During Q3 FY19

GTPL Hathway has released its Q3 FY19 earnings report. The cable and broadband service provider revealed that its consolidated EBITDA...

Tata Sky Regional Offerings Get a Boost With 13 New HD Add-On and Mini Packs

Tata Sky, the prominent DTH provider has introduced a new stream of HD add-on packs thus lengthening its list with...