Reliance Jio will be 70% bigger than Airtel, Vod-Idea in 3 years-India Ratings

Projected market shares

Reliance Jio, the start-up telecom operator, will become 70% bigger than current market leaders Vodafone Idea and Bharti Airtel in India in three years, India Ratings said.

By FY22, Reliance Jio will have cornered 43.2% of the Indian telecom revenues, while Vodafone Idea and Bharti Airtel will have to be content with 25.4% each, the credit rating agency said in a report today.

At present Reliance Jio is smaller than both Vodafone Idea and Bharti Airtel.

As of the year ended March, Jio accounts for about 27.5% of the total telecom revenue generated in India, while both Airtel and Vodafone Idea accounted for more than 32% each.

The ratings agency also predicted that revenue for non-Jio players will fall by 4% in the current financial year ending in March 2020. However, because of revenue growth at Jio, the telecom industry in India will report an 11% growth in revenue this year, it said.

Last year, the industry — including Jio — saw neither a decline nor growth in wireless revenue, while the year before that saw a 4% decline.

“Reliance Jio [is expected] to deliver 30-35% annual revenue growth as against flattish revenue trajectory for Vodafone Idea / Bharti Airtel (India business),” the agency said.

“Rjio’s revenue growth [will be] supported by increase in subscriber base and growth in ARPU,” analysts at the firm added.

Even on the profitability matrix, Jio is already ahead of the others, while the other two will show an improvement in the next two to three years, they said.


4G data prices

While Bharti Airtel and Vodafone Idea are reported to be in favor of higher data prices, for now, India Ratings is predicting price stability.

The firm noted that there was an industry-wide increase in wireless data pricing seen towards end 2018/early 2019, and those prices seem to be holding.

As of now, the analysts said, the average price of 1 GB of data is Rs 3.2 for Jio and Rs 4.8 for Airtel and Vodafone Idea, going by their most popular and affordable, long-term unlimited plans.

They also said that rising data consumption on legacy networks — Bharti Airtel and Vodafone Idea — indicated the beginning of a turnaround for these players.

“Bharti has been a reporting steady growth in data traffic, and with average monthly usage of 11 GB/user, overtook R-Jio in data consumption,” the analysts noted.

“The rising share of high-ARPU data subscribers along with rising data traffic and stabilising data tariffs augur well for future revenue growth.”