Jefferies reports on how Reliance Jio free offering led to 11.7% fall in industry revenues


On Wednesday, Jefferies issues a report which state that, the growth of Jio subscriber base and its free offering till fourth quarter of 2016-17 has led to 11.7% year-on-year decline (8.5% quarter-on-quarter decline) in industry revenues.

According to the report “Reliance Jio effect was also evident in the decline being maximum in metro and A circles where Reliance Jio has a higher penetration, and where the smartphone ecosystem is better developed”.

By the end of fourth quarter of 2016-17 Reliance Jio has continued to increase its subscriber base steadily to over 108 million with active subscriber base of 80 million as per the reports. A slowdown in additions has seen in recent month, mainly on the back of a limited 4G device ecosystem.

In India, the total number of 4G based smartphone installed base of 131 million implies that Reliance Jio is penetrated into 86% of the devices (61% by active subscribers).

It stated that the more growth from data services, decline in voice and the lesser investments made by operators outside the top 3 has started showing up in steeper decrease in revenue for them.

“The Top-3 combined now have a 76 per cent revenue market share in the industry. As we stressed in previous reports, this decline in smaller operators would be extrapolated to industry consolidation. However, we think India will remain a five player market at best, with three equally strong competitors (Bharti, Voda-Idea combined, Jio) being as bad for incumbents as a fragmented market at present,” the report added.

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Himani Sharma, From ITvoir News Desk