Recent data suggests Jio has left Airtel behind in subscriber base to become India’s second-biggest telecom company. The number of Jio customers are now 30.6 crore standing behind only Vodafone-Idea which has 38.7 crore. With 28.4 crore customer base, Airtel now stands on third place.
The 30-crore milestone was breached by Jio on March 2 this year. Airtel had achieved the same landmark in 19th year of its operations.
Jio had bagged 100 million customers within 170 days of opening shop — becoming the fastest company in the world to achieve the remarkable feat.
Growth at breakneck speed has been the hallmark of Jio’s story since its big-bang launch in September 2016. In the two and a half years since its launch, customers have flocked to Jio because of its dirt-cheap prices. In 2018, new subscriber addition by Jio stood at a humongous 12 crore.
During just the first three months of this year, Jio added 2.7 crore new subscriber, JP Morgan said in a report. In stark contrast to Jio’s aggressive wooing tactics, its rivals have been weeding out low-paying subscribers.
Jio’s hyper aggressive price war has run rivals ragged, with Airtel and market leader Vodafone Idea bleeding continuously and heavily. But even as its competitors bled, Jio’s profit in the year rose four times to $427 million (Rs 2,980 crore), data released by the company showed.
Trai data for December quarter showed Jio consolidated its lead over rival carriers on adjusted gross revenue (AGR) in the quarter to December. Jio’s AGR — or revenue from licensed services — rose 14.63% on-quarter to Rs 9,482.31 crore at the end of December. In contrast, Vodafone Idea suffered a 4.05% sequential fall to Rs 7,223.72 crore, while Airtel’s slipped 4.18% on-quarter to Rs 6,439.65 crore.
One quarter earlier, Jio had become the top telco by AGR, when it had trumped Vodafone Idea on that count.
More bad news for rivals
Analysts have more bad news for the already stretched challengers of Jio. The ToI story quotes JM Financial as saying, “We see no prospects of a tariff hike in FY2019-20, unless Jio’s net addition (of subscribers) comes down.”
Meanwhile, Jio’s aggression shows no signs of abating. It continues to go all-out to court customers with cut-throat price plans. Riding on its 4G power, it continues to lead all rivals by a mile in the data business.
The JioPhone — the handset that comes bundled with services — has played a prime role in making Jio the strongest and fastest in bagging data customers.
According to the ToI story, Jio grabbed 60% of new 4G customers in 2018, and 65% of industry 4G customers by the end of the year. Besides, during the year, Jio carried 70% of all 4G data traffic — and 61% of overall data traffic — in India.
Ambani’s aggression has turned the financial equation of his telecom rivals upside down. With its local operations deep in the red, Airtel’s fall in Jio’s wake has been extraordinary. Even Vodafone Idea — the merged entity that’s the new king of the teleocm leader board — has been forced to cut operating costs and fall back on its synergies.
Before Jio came into the scene, Airtel dominated Indian telecom for close to two decades. It was the numero uno of the sector till mid-2018 when Vodafone and Idea merged to form a new behemoth that toppled the Sunil Mittal-led telco from the top perch.
Mukesh Ambani has always maintained that Jio would not be a pure-play telco but a business that would set up a digital ecosystem featuring fintech, high-speed data and entertainment. The power of Jio could eventually be harnessed to dominate Indian retail, analysts have said. Going by a slew on recent deals, Ambani seems to be already on the way to that end.
“The acquisitions will help Reliance create a unique and a very powerful digital economy ecosystem for Reliance, which is way beyond simple merchandise e-commerce,” Arvind K. Singhal, chairman and managing director of Technopak Advisors, told Bloomberg.
As Ambani — slowly but surefootedly — puts in place the components to take Amazon and Walmart head on, the contours of the bigger war are fast taking shape. The battle lines have been already drawn.
Can Ambani replicate the Jio story in retail? The clue might lie in how he used his telco to sledgehammer rivals into submission — all in a span of a little over two years.