Reliance Jio’s Tariff War Takes Biggest Toll on Vodafone-Idea

Jio’s tariff war hurts Vodafone and Idea Cellular the most.

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The tariff war triggered by Reliance Jio Infocomm Ltd has hurt the Vodafone India Ltd and Idea Cellular Ltd combine the most.

The India’s youngest telecom operator controlled by Mukesh Ambani gained nearly seven percentage points of revenue market share from Vodafone-Idea Cellular since it started reporting its financials in the quarter ended June 2017, according to data compiled by BloombergQuint. Reliance Jio gained two percentage points from Bharti Airtel Ltd during that period.

How Jio is becoming a nightmare for other incumbents.
How Jio is becoming a nightmare for other incumbents.
(Photo: BloombergQuint)

Reliance Jio gained another 14 percentage points at the expense of smaller operators – BSNL, MTNL, Aircel Ltd, Reliance Communications Ltd, Telenor India and Tata Teleservices.

The revenue market share is calculated based on the adjusted gross revenue –factoring in interconnect usage charges and other deductions – provided by the Telecom Regulatory Authority of India. It includes national long-distance revenue.

State-owned BSNL and MTNL gained revenue market share. Telenor Communications Pvt Ltd and Tata Teleservices shut operations after selling assets to Bharti Airtel, while Reliance Communications continues as a virtual network after selling its assets to Reliance Jio.

The telecom sector’s adjusted gross revenue rose the first time in three quarters during April-June. The growth was led by Reliance Jio’s 14 percent increase while its major rivals reported a drop.

Growth of Jio in the last few quarters.
Growth of Jio in the last few quarters.
(Photo: BloombergQuint)

Excluding national long-distance revenue, Reliance Jio’s revenue market share stands at 30 percent – the highest in the industry. That’s because unlike its peers, Reliance Jio hardly assigns any value to national long-distance revenues as it is a data-driven network.

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