What happens when a telecom market
goes, from a phase of fierce competition between multiple companies to a phase with only three effective players? We're going to find out. Before Jio launched its six-month giveaway schemes, there were up to a dozen players fighting for space in each telecom circle.
Reliance Jio Infocomm
(RJio) swept up the value-conscious Indian consumer with its free calls and bucketfuls of cheap (initially free) data. Within a year, India became the world’s biggest data consumer. Now, three giants are left standing after the Vodafone-Idea merger.
Two of those three have dodgy balance-sheets, and dangerously high levels of debt. They are also struggling to cope with recent losses. The merged entity, Vodafone-Idea, will be desperately trying to cut costs. RJio
is cash-negative and depends on its parent’s resources.
A comparison of subscriber market share numbers with revenue market shares makes the concentration obvious. In terms of subscribers, India had 1.15 billion mobile connections by June end. Vodafone-Idea was the leader with 408 million combined subscribers, while Airtel had 370 million and RJio
claimed just about 205 million. That’s about 83 per cent in terms of subscribers. BSNL holds most of the rest.
In terms of revenue market share, Vodafone-Idea holds about 34 per cent, with Airtel at 31 per cent and RJio
at 22 per cent. The difference is due to higher data consumption. Purely in terms of data revenues, RJio claims close to 40 per cent.
The Indian market, vast as it is, has hit a plateau in subscriber numbers. There will be fewer new subscribers once smaller players have exited and their subscribers have migrated. Most new subscribers will be low average revenue per user (ARPU) rural residents.