Reliance Jio Thriving in Tier Two Cities and Rural Areas Thanks to JioPhone

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Reliance Jio, the latest telecom entrant in the Industry which caused havoc by its entry into the industry with its extremely affordable prices and unique offerings has been riding the wave of revenue on the back of the success of its Reliance JioPhone. The JioPhone, which is an affordably priced feature phone with 4G enabled and offering almost smartphone-level services, has been one of the prime reasons behind Reliance Jio’s massive growth in the tier two cities and rural areas. The Telecom Regulatory Authority of India, (Trai) has issued new data which states that adjusted gross revenue of the Mukesh Ambani led telco has increased by 18% in the non-metro cities, while it has remained stagnant in the three metro cities of Delhi, Mumbai and Kolkata. On the other hand, the same parameter for the other two telecom operators has witnessed a decline.


Reliance Jio Leading in AGR, Incumbents Suffer

As per the norms stated by Trai, the adjusted gross revenue is calculated after deducting the interconnect usage charges and other expenses from the revenue. While, the revenue market share, another important parameter in the industry, is mapped on the basis of adjusted gross revenue along with national long distance revenue.

As per this new report by Bloomberg, the telco has now seen a rise in revenue market share for the fourth consecutive quarter, thus closing in on its competitors Vodafone Idea and Bharti Airtel. The newly merged telco, Vodafone Idea has suffered the wrath of the industry, with dented revenue while the Mukesh Ambani led company has managed to capture more than one-fourth of the total industry revenue.

A Quarter of Suffering for Vodafone Idea

Taking a more in-depth look at the report, it is evident that Vodafone Idea was on the crosshair this time as the telco lost nearly nine percentage points against Reliance Jio, while Airtel and BSNL each dropped three and four percentage points during the second quarter of the last financial year.

Speaking of the adjusted gross revenue in the quarter ending September, the Sunil Bharti Mittal led telco, Bharti Airtel witnessed a decline of 3%, whereas the current biggest telco of the country, Vodafone Idea registered a drop of 6% in its revenue. In contrast, Reliance Jio made a 16% leap in the same area thanks to the massive subscriber addition, mostly led by its affordable feature phone offering – the JioPhone. Speaking for the figures of the entire industry, there was a drop in adjusted gross revenue in the last quarter also the revenue dropped in four of the previous five quarters thus signalling affirmative to the trend of a weak second quarter for telecom operators.

Barring the national long-distance revenue for Reliance Jio, the telco’s revenue market share currently maps to be 33.7%, a figure which no other telco claims right now. One of the reasons behind this seems to be Reliance Jio’s irrelevance with national long-distance revenue since the telco remains majorly data-driven.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.


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