Jio set to overtake Airtel as top telecom firm by revenue
NEW DELHI: Bharti Airtel Ltd, which was India’s largest operator till a year ago, will announce its June quarter earnings on Thursday, but the day will be more significant for its arch-rival Reliance Jio Infocomm Ltd, which is expected to be crowned the number one telco.
With Bharti’s revenue unlikely to exceed that of Reliance Jio, India’s richest man Mukesh Ambani will have achieved a rare feat with his telecom company grabbing the top spot in the market in less than three years of starting operations. Last week, Jio, for the first time, surpassed Vodafone Idea Ltd in terms of operating revenue. Despite more subscribers, Vodafone Idea, which posted revenue of ₹11,269.9 crore in the June quarter, lagged behind Reliance Jio’s ₹11,679 crore.
In the March quarter, Bharti Airtel’s India mobile business generated ₹10,632 crore. Top brokerages expect Airtel India mobile revenue to grow just 1-2% sequentially in the June quarter.
“Indian wireless revenues (for Bharti Airtel) are expected to grow 1.7% quarter-on-quarter to ₹10,810 crore,” ICICI Securities said in a report dated July 8.
The brokerage expects Airtel’s Indian wireless business to witness muted net subscriber addition of 1.1 million given the weakness in wireless broadband subscriber addition.
Motilal Oswal, too, expects Airtel’s India wireless revenue to grow by a meagre 1.1% sequentially to ₹10,750 crore.
With Airtel’s June quarter results to be announced on Thursday, the dust will settle in the telecom battleground with Reliance Jio likely to emerge as the market leader from its challenger position three years ago.
Jio entered the telecom sector in September 2016 with cheap data plans and affordable handsets, which led to an unprecedented rise in mobile data consumption in the country, with an average user consuming 11 gigabytes data per month.
Earlier this month, Reliance Jio overtook rival Bharti Airtel to become the country’s second largest operator in terms of mobile phone subscribers. Jio had 322.98 million users and 27.8% subscriber market share, against Airtel’s 320.38 million users and 27.6% market share as of end-may, according to data from Telecom Regulatory Authority of India.
The leadership position is also significant for Jio as it would allay concerns about the company not raising tariffs even as it reinvents itself as a technology platform.
At last year’s annual general meeting, Ambani had said digital platforms were becoming the new-age factories and that Reliance was embarking on a golden decade. “As the golden decade rolls on, our consumer businesses will contribute nearly as much to the overall earnings of the company as our energy and petrochemical businesses,” he said on 5 July last year.
Reliance has invested over ₹2.5 lakh crore in building mobile and broadband infrastructure.