According to a company statement released on 31st January 2019, the customer base of Airtel totaled 28.42 crores in December 2018. As TRAIs data for Airtel’s performance in November 2018 showed a customer base of 34.1 crore customers, the implication is that the telecom giant ended up losing 5.7 crore customers in the span of a single month. Conversely, as per Jio’s reports, the newer entrant in the market has 28 Crore customers and seems to be growing by the day. Can one attribute Airtel’s loss to Jio’s gains? Let us find out.
Airtel’s revenue vs Jio’s revenue
With a net profit of Rs. 83 Crore reported in the Q3, Airtel is now staring its 11th quarter of losses in the face. The loss of 5.7 crore customers led to Airtel’s revenue dropping below Reliance Jio for the first time since the newest telecom network in India was introduced. On the other hand, Jio is enjoying its 5th consecutive quarter of profits, with an overall 65% increase in profits. As per reports, the number stands at an astounding Rs. 831 Crore.
Minimum balance and no more lifetime free incoming – fall of Airtel?
Airtel ended the ‘Lifetime free incoming’ plan in December 2018, which sparked estimated losses of 50-70 million customers. Airtel, however, remained unfazed in the face of these numbers, stating that most Sims purchased under that plan were not even in current use. They’ve also asked customers to maintain a minimum balance of Rs 35 for their sim cards to be valid.
Executives at Airtel believe that this new policy will increase their overall average revenue per user (ARPU), which will help make up for the exponential loss of customers. However, so far, with the reports that have been released, it does not seem to be working.
According to the reports regarding ARPU during the last quarter of 2018, Airtel’s ARPU has remained at Rs 100 while Vodafone generated Rs 88. Reliance Jio, on the other hand, is leading the fray with an ARPU of Rs 130.
However, it is worth noting that Airtel has seen a rise in the 4G customer base, with the same standing at 7 crores last quarter.
What lies ahead?
According to a report from India Ratings and Research, Jio is all set to emerge as the telecom leader and this is most likely to happen during the fiscal year that’s starting April 1. This research firm believes that Jio is going to continue to snatch up customers from both, Airtel and Vodafone-Idea.
With a majority of customer complaints centered on Airtel’s poor network connectivity during voice calls, the fact that Jio was the only network not to fail TRAIs call drop test in the middle of the highway is a fair indication of where Airtel’s customers are looking to migrate. One can certainly attribute Airtel’s losses to Jio’s seemingly superior network, cheaper rates, and continued rise in the market.
Only time will tell how relevant Airtel will be in the Indian telecom market in the few years. These losses certainly point towards a slow road to the brand’s oblivion.