Reliance Jio has grown into the largest telecommunication leader by earnings and subscriber base, India Ratings said on Monday.
Reliance Jio Infocomm has remained aggressive in subscriber acquisition and has become the largest player in terms of wireless subscriber market share, broadband subscriber base and revenue, it said.
The increase in Jio’s subscriber base is largely at the cost of Vodafone Idea, whose subscriber market share has declined consistently in the last two years.
Revenue market share of Jio’s also grew to 34.9 percent in 2QFY20, which is the highest in the industry compared to other players, the agency said.
India Ratings also stated that the business is exhibiting indications of recovery.
The average revenue per user (ARPU) published by telecommunication organizations has commenced exhibiting signs of improvement in the last two to three portions. Moreover, the recent tariff hikes by telcos in the range of 25 percent to 35 percent is likely to support the increase in ARPU over the next few quarters. Furthermore, the share of broadband subscribers in the overall subscriber base is on a continuous rise.
The rising share of data subscribers along with growing data traffic and stabilizing data tariffs augurs well for revenue growth in our view, India Ratings said.
It also said that the release of a consultation paper by Telecom Regulatory Authority of India (TRAI) in December 2019 to evaluate setting a floor price for telecom tariffs is a decisive movement for the telecommunication enterprise in its sense. Additionally, some insight of ease to the telcos was also rendered by the length of the implementation of zero interconnect mode management regime by a year, the company stated.
TRAI has extended levy of Rs. 0.06/minute till December 2020 from December 2019 earlier. As a consequence, the operative date of implementation of the administration has been delayed to January 1, 2021.
Indian Ratings has downgraded VIL’s long-term issuer rating to ‘IND BBB-‘ from ‘IND BBB’ while maintaining it on rating watch negative. The downgrade speculates the crystallization of modified total earnings-related contracts for VIL post the Supreme Court’s unfavorable ruling on January 16, removing the revision petition registered by telcos. The SC ruling provides clarity on the liabilities that are payable by VIL to the Department of Telecom, which was earlier contingent upon the outcome of the review petition, the agency said.