Jio Continues to Lead the Chart With High ARPU Compared to Other Telcos: Ind-Ra

Reliance Jio’s ARPU is higher than that of telcos as we already know that and the telco continues to lead the chart. India Ratings and Research (Ind-Ra), the rating agency has published its September 2018 edition of credit news digest on Indian telecom sector. In the latest news digest, Ind-Ra highlights the trends in the telecom sector with a focus on subscriber additions, subscriber market share, broadband subscribers, data usage, average revenue per user (ARPU) and profitability of the key incumbents. Ind-Ra opined that Reliance Jio has continued on its market share growth trajectory, with high ARPU levels and increased profitability. The growth has been supported by large data allowances at low prices, aggressively priced tariff plans and tie-ups with over the top (OTT) players.

jio-high-arpu-compared

Jio Continued its Steady Subscriber Growth

In August 2018, 9.8 million wireless subscribers were added in the telecom sector. Jio continued on its strong subscriber growth trajectory and added 12.2 million subscribers, led by the launch of 4G feature phones, while other telcos either reported flat subscriber growth or a decline. Aircel Cellular Limited has not reported subscriber numbers since April 2018. Most of its subscribers would have moved to other telcos due to the closure of its services.

The steady subscriber growth helped Jio gain maximum market share in the wireless department. Jio’s wireless market share for August 2018 increased to 20.5% (July 2018: 19.6%). The increase is further characterised by the reduction in gross revenue of other incumbents. Meanwhile, Jio’s subscriber base grew 5.4% on a monthly basis, while other players such as Bharat Sanchar Nigam Limited and Idea Cellular Limited’s subscriber base fell 0.6% and 1.6%, respectively. However, Vodafone India Limited and Idea Cellular now together hold 37.9% (July 2017: 33.8%) of the subscriber market share.

Sustained Decline in ARPU Impacting Key Players

Furthermore, Ind-Ra stated that Jio’s aggressive marketing strategy and aggressive tariff plans among the key incumbents have led to a decline in the overall average revenue per user (ARPU) levels over the last two years. ARPU for key players came down to 100-105 during 1QFY19 from 140-150 in 4QFY17. Reliance Jio remains an outlier, with the highest ARPU level of 135 in 1QFY19.

“To keep a tap on the churn rate, key players are now focussing low tariff plans coupled with large data allowance at a low price, further putting downward pressure on ARPU levels. Also, telcos are focussing on providing content freebies to increase subscriber stickiness through OTT platforms,” said Ind-Ra in the report.

Bharti Airtel’s EBITDA Margin Decline

Reliance Jio’s wireless EBITDA margin remained at 32% for the last two quarters (with minor blip), while Bharti Airtel Limited wireless margins tumbled around 440bp qoq for 2QFY19. Bharti has lost 12% of its annual revenue in India during the last six months, mostly to Jio. Also, Bharti’s margin declined to 31% in 1HFY19 from 38% in 1HFY18, attributable to increased competition and low ARPU realisation. Moreover, based on the attractive tariff and OTT partnership, Reliance Jio reported a low monthly churn of 0.66% compared to Bharti’s elevated churn levels of (4.1%).

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Nikhil Mumbai-PuneVipin (Mumbai)Sudhakar PKaushik IMAKiran Fernandes | Goa Recent comment authors
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Indra
Indra

An sms from Idea in Pune keeps coming to me daily:

1) Mai hu Aapki Apni Dost. Call 55365 sirf Rs 9/m
2) Bhavishya jaaniye. Dial 55181 @9/m
3) Yoga Guru se seedhi baat @Rs6/m. Dial 54673
4) Hasgulle @5567855 Rs6/m

hahaha……………………”Sudharna Mana hai”

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

This has stopped since one and half years for me.

Ram
Ram

Of course JIO tariffs are transparent and simple to customers. While airtel, Vodafone idea combined tariffs are all with all sought of hidden agenda and plenty of terms, conditions to fool and cheat customers…

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

+1

But Airtel/Vodafone-Idea network is usable compared to Jio right now in my honest opinion.

Sudhakar P
Sudhakar P

Usable network don’t get low ARPU. Stop lying. Vodafone Idea network is the loser with Rs88 ARPU. Jio is the best network with Rs135 ARPU.

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

For me it works without any problems.

Kaushik IMA
Kaushik IMA

Actually it makes sense, anyone with a good 4G phone will use Jio, and Airtel has a good hold on 2G, meaning VIL had to cut prices to gain customers, which is exactly what happened.

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