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Reliance Jio’s freebies led to 11.7% fall in telecom revenues: Report

Reliance Jio’s freebies led to 11.7% fall in telecom revenues: Report

New Delhi: The growth of Reliance Jio subscriber base and its free offering till 2016-17 fourth quarter has led to a 11.7 per cent year-on-year decline (8.5 per cent quarter-on-quarter decline) in industry revenues, a report by Jefferies said here on Wednesday.

“The growth of Reliance Jio subscriber base and its free offering till the end of fourth quarter of 2016-17, has led to a 11.7 per cent year-on-year decline (8.5 per cent quarter-on-quarter decline) in industry revenues.

“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,” the report said.

The report said Jio has continued to increase its subscriber base steadily to over 108 million by the end of fourth quarter of 2016-17 with active subscriber base of 80 million. The most recent month has seen a slowdown in additions, primarily on the back of a limited 4G device ecosystem.

Total 4G smartphone installed base of 131 million in India implies that Jio is penetrated into 86 per cent of the devices (61 per cent by active subscribers).

It stated the higher growth from data services, decline in voice and the lower investments made by operators outside the top three has started showing up in steeper decline 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.

IANS