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Jio surpasses Airtel to become No. 2 telecom company of India
Mukesh Ambani owned Reliance Jio has surpassed Bharti Airtel's subscriber base and stood as the second-largest telecom company in India.
Almost two-and-a-half years after initiating mobile phone services, Mukesh Ambani owned Reliance Jio has surpassed Bharti Airtel's subscriber base and stood as the second-largest telecom company in India.
Jio has a customer base of 30.6 crores, now follows only Vodafone-Idea. Airtel has 28.4 crore subscribers while Vodafone-Idea declared in December 2018 that it had 38.7 crore subscribers. Airtel's numbers were confirmed by a company spokesperson on Tuesday evening.
A telecom industry analyst told that the growth rate of Jio's subscriber additions may soon overtake Vodafone-Idea in the coming quarters. "Vodafone-Idea is the most vulnerable of the three private players in the market, and it may just be a matter of few more quarters, maybe three-four, before it is overtaken by Jio," the analyst told, requesting secrecy as he advises many other telecom companies.
Sunil Mittal owned Airtel, which ruled the Indian telecom industry for almost two decades, the fall has been dramatic – it was dominating the market till the mid of last year prior to being edged out by the new entity that formed after the merger of Vodafone India and Idea Cellular.
The dramatic growth in Jio's business after it launched services in September 2016 has been fuelled by violent and dirt-cheap consumer tariff plans with the firm rolling out operations with free voice call facility.
Mohan Shukla, CEO of FinXPros, a consultancy firm told, "The remarkable growth of Jio has been unprecedented and the company is expected to dominate the customer acquisition space through aggressive and innovative tariff plans, including bundling of content packages,"
At a time when Airtel and Vodafone-Idea were weeding out low-paying users, Jio was adding subscribers at breakneck speed. As per a report by JP Morgan, Jio added 2.7 crore new customers amid January and March 2019, after logging in 12 crore new members in 2018.
Notably, the company continues to rule the data space through its 4G-only business, and is actively adding more customers with cut-throat tariffs. "… we see no prospects of a tariff hike in FY2019-20 unless Jio's net-additions (of subscribers) come down," JM Financial said in a just-released report.
Mukesh Ambani owned Jio's aggressive entry into the telecom business – in the mobile space – had unleashed the financials of the industry completely. Airtel, initially accused Jio of engaging in "predatory pricing" to gain market share, its domestic operations slip into losses, while Vodafone India and Idea were forced to strike synergies and lower operating costs.
However, Jio continues to be profitable in its operations and also had the highest adjusted gross revenue (AGR) in access services amongst all the telecom companies in the December quarter. Jio's AGR was Rs 9,482 crore, Vodafone-Idea was at Rs 7,224 crore and Airtel at Rs 6,440 crore, as per a report released by Trai.
In terms of bagging internet customers, Jio has been the strongest, mainly because it offers mobile handsets bundled with its services. Last year, Jio captured 60% share of new 4G subscribers, 65% of industry 4G customers by the end of December 2018. In 2018 it carried 70% of 4G data traffic and 61% of overall data traffic.
From the time of inception Ambani was very clear that his business would not be a pure-play mobile telecom company, but create a digital eco-system that – among other areas – which would focus on high-speed internet, news and entertainment, chat, music, movies and financial transactions.
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