- Jio entered the telecom sector in September 2016 and disrupted the industry with dirt-cheap tariffs.
- Vodafone Idea stays on the top position with the 387.55 million users.
Reliance Jio Infocomm Ltd. has overtaken Bharti Airtel to become the 2nd largest operator in terms of mobile subscriber base as shown by Data from the Telecom Regulatory Authority of India (TRAI), which was made public on Friday. As of May end, Jio has now 322.98 million users as compared to 320.38 million users of Airtel.
Vodafone Idea stays on the top position with the 387.55 million users. The subscriber numbers include active as well as inactive connections.
Jio entered the telecom sector in September 2016 and disrupted the industry with dirt-cheap tariffs, internet connection forcing other small operators to either close down or merge with big telecom operators.
Jio’s parent Reliance Industries will announce its financial results for the April-June quarter. Jio has reported a profit of Rs. 84 billion for the March Quarter on operating revenue of Rs. 111 billion. It had a subscriber base of 306 million as of March-end which means 17 million new users got added Jio’s customer base in 3 months.
With the backing of such strong user additions, Jio is expected to show improved revenue. Although, Average Revenue Per User (ARPU) may decline given these additions are of low paying users.
Reliance Industries’s telecom arm is expected to report a revenue of Rs. 119 billion with 329 million subscribers, while ARPU is expected to drop to Rs. 125 as reported by Goldman Sachs.
Although Jio has witnessed continuous drop in its average monthly billings over the past five quarters it still is outperforming its rivals on this metric. From Rs. 154 in the December 2017 quarter, Jio’s ARPU fell 15.6 percent to Rs. 130 in the same quarter in 2018 and to Rs. 126.2 in the March 2019 quarter
ARPU is the total revenue of the operator divided by the number of users or connections on its network.
Airtel’s ARPU for the March quarter was Rs. 123, an 18.6 percent increase from Rs. 104 in the December quarter. Vodafone Idea lags behind these two, with its ARPU at Rs. 104.
While its rivals are trying to lure the leaving bottom of the pyramid subscribers with minimum recharge plans and improving their ARPU, Jio continues to widen its subscriber base by adding low-paying users on its network.
“RJio ARPU will be soft as more JioPhone users are added at low price points. However, strong subscriber addition for RJIo to lead to higher Q1 revenue,” Axis Capital said in a report dated 3 July.
With both the comapnies offering really cheap Jio recharge and Airtel recharge, this battle is getting more interesting.