Reliance Jio will use data muscle to capture Indian teleccom, see how?
Reliance Jio Infocomm aims to capture half of India’s revenue market share and aims for 50% EBITDA margins, underpinned by increased data consumption and service quality the company expects will draw high-paying consumers to the carrier owned by the country’s richest man.
In the December quarter, Bharti Airtel had a market share of 33.1%, Vodafone India owned 23.5%, and Idea Cellular had 18.7%. They were followed by Tata Teleservices Ltd (TTSL), Aircel and Reliance Communications with 6.2%, 5.5% and 4%, respectively, according to brokerage HSBC. Similarly, Bharti Airtel had an ebidta margin of 36.7% and Idea Cellular 25% in the December quarter. In the six months to September, Vodafone India’s ebidta margin was 29.6%. Vodafone India and Idea are in talks for a possible merger.
In a presentation to analysts, Jio said data will be at the vanguard of its planned market-share expansion. The company did not specify the time-frame for reaching its financial targets, but people familiar with the matter said these were expected to be met in 2020-21.
Deutsche Bank Equity Research Asia, which attended the first analyst meeting held by Jio, said the company expects India’s mobile market will expand by 50% over five years to $45 billion (Rs 3 lakh crore) versus $29 billion (Rs 1.94 lakh crore) currently. Industry revenue growth is likely to drive government revenue by 50%, Jio said in its presentation.
