Is Reliance Jio already the second largest telecom firm in India?

The Adjusted Gross Income (AGR) of Reliance Jio Infocomm Ltd has been positioned within the Telecom Regulatory Authority of India’s (TRAI) March quarter monetary report. 6,218 crores. That is round 22% larger than the income of Vodafone India Restricted and solely 12% decrease than the AGR of market chief Bharti Airtel Restricted. 7,087 crore.

Based mostly on these numbers, Reliance Jio has a market share of 25.6%, lower than two years after its launch. Vodafone and Thought Mobile Ltd, each of which had a virtually two-decade debut on Reliance Jio, had an AGR market share of 21% and 16.6%, respectively.

However clearly, the AGR determine must be barely adjusted to replicate the precise market share. The AGR reported by telcos for his or her varied circles doesn’t totally seize the income paid by prospects for roaming and nationwide lengthy distance (NLD) calls. As such, it is sensible so as to add up the NLD revenues reported by telcos to the extent that their captive prospects are utilized and arrive on the adjusted AGR, when you so want.

Based mostly on estimates from Kotak Institutional Equities, after these changes, Reliance Jio has a market share of 20.7%. We made one other adjustment to replicate the income of Aircel Ltd., which filed for chapter earlier this 12 months and didn’t trouble to report the income to TRAI.

Based mostly on this so-called AAGR information, Reliance Jio has a market share of 20.4%, which isn’t a lot lower than Vodafone’s 21.5%. So whereas the brand new entrant is not No. 2 but, it isn’t too far off the mark.

The corporate may nicely attain that milestone within the June quarter, although it might be relegated to the third spot after the Vodafone and Thought merger announcement.

Whereas Reliance Jio has quickly grabbed one-fifth of the market, its cut-throat pricing has slashed revenues of bigger corporations by greater than a 3rd. Small companies’ revenues have declined by 85%, and it’s only a matter of time earlier than it disappears completely.

Because the launch of Reliance Jio, the general business dimension has fallen by round 30% primarily based on the above AAGR information. A key query is how a lot much less this might go along with Reliance Jio persevering with to aggressively vie for a much bigger piece of the pie.

As reported earlier on this column, Reliance Jio’s actions present that it’s completely happy to reside with a excessive share of a market that has shrunk considerably, and never one with much less share in an unconnected market. That is very unhealthy information for the incumbents, as the autumn in revenues within the final six quarters reveals.

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