BHUBANESWAR: Mukesh Ambani-led Reliance Jio, which has disrupted the telecom sector after its launch, is set to become the market leader. According to a Sanford C Bernstein & Co report, Jio Infocomm Ltd could become the country’s top telecom operator by revenue in 2021, and on the basis of subscriber base by 2022 as it adds more subscribers.
No start-up operator has managed such a feat anywhere —and certainly not in a market where penetration levels among the ‘middle classes’ were already high. Given the current rate of ongoing customer acquisition, Bernstein & Co analysts Chris Lane and Samuel Chen are convinced Jio’s relentless subsidy of Jio Phones will continue until this goal is realised. The company sells the 4G JioPhone for a refundable deposit of `1,500 and has consistently been adding six to ten million new active customers per month.
Earlier, in 2015, when it initiated coverage of the Indian telecommunications market, analysts from the same firm said they knew Jio was destined to profoundly change the landscape—the company had national spectrum, had been laying down optical fibre cables, and had the backing of the richest man in India.
“We expected ‘unlimited’ voice and ‘big buckets of data’ to put pressure on the market, forcing consolidation of the many smaller players. We even contemplated Jio could eventually surpass Idea Cellular to become the third largest operator in the country. But never expected, nor did we think possible, that it could eventually become the leading operator in the market,” it noted. It now expects Jio to reach 28 per cent revenue market share and 26 per cent subscriber share by the end of this financial year (March 2019) as “we expect both Bharti and Vodafone to not respond directly,”
Rival leaders Airtel and Vodafone lack the “stomach” to battle Jio, which is luring away users with free voice services and inexpensive phones. “We believe they have accepted their fate, and are looking forward to a time when Jio, having achieved a leading position, starts to monetise their base through higher pricing,” the report said.