Jio’s entry to help telecom industry double data revenues to $11 billion by 2017-18: CLSA

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Reliance Jio would drive the Indian telecom market further and help the overall industry to double to $11 billion by 2017-18, according to brokerage firm CLSA. The firm, in a note, said that Bharti Airtel and Reliance Jio are best placed to gain from the surge.


"Over fiscal years 2015-16 to 2017-18, we expect data revenues to double and Bharti Airtel and Reliance Jio are best-placed to gain, given their lead in spectrum as well as higher fibre and sites on network,” CLSA said.

The industry’s data revenues will more than double to $11 billion growing at a 9 per cent compounded annual growth rate in the industry revenues to $34 billion, despite the low penetration of data on mobile, the brokerage said. The total mobile data subscribers has reach at 312 million, even as the mobile data penetration remains low at 31 percent, implying a large growth potential, the report said, adding that Reliance Jio's much awaited 4G service launch this year should help to accelerate this data adoption and expand the market further.

"While the 3G/4G adoption has picked up with subscribers tripling over the past two years to 133 million, penetration is still low at mere 13 percent," the report said.

According to CLSA, for the Indian telecom operators, the key differentiator will be network delivery and the quality of service along with download speed. Ahead of Jio’s commercial entry, a number of telcos have already started focusing in these aspects. Indian telecom operators have also begun to focus on content to differentiate among themselves.

"Given that each operator's content is not exclusive and the service differentiation will be led by network experience, operators are rolling out 3G/4G at an accelerated pace. Also given that content with each operator is not exclusive and can be replicated, we believe content is not going to be the key differentiator among operators," the brokerage's study said.

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