IDEAL CELLULAR – RTN asia

New telecom operator Reliance Jio is estimated to have notched up a market share of around 10.5% in terms of total telecom revenue in India, broker Credit Suisse said. However, after deducting interconnect payments made to rivals, Jio's share is likely at around 9%, it said. "We conclude Bharti and Vodafone+Idea may have lost at least 80-240 bp (0.8 to 2.4 percentage point) market share each since Jio's launch," said analysts Sunil Tirumalai and Viral Shah. Rival UBS Global had predicted in May that Jio will reach the 10% mark in 2019-20. Last month, Fitch Ratings said the company will reach the 10% mark in 2018. Credit Suisse also said Jio's average revenue generation is around Rs 150 per user per month, more or less in line with Bharti Airtel's. The analysts based their conclusions on numbers submitted by telecom operators for the March-June period. Contrary to perceptions that the worst period for the incumbents was in January-March, the analysts said Bharti Airtel saw a decline of 5% in its revenue in April-June after adjusting for interconnect payments. "While Bharti reported flattish quarter-on-quarter revenues (on a gross revenue basis), the adjusted revenues (reflective of revenues after inter-operator settlements) fell 5% for the company – a result of Bharti offering unlimited voice calling plans (similar trends for other incumbents)," they pointed out. "Thus, the ‘bottoming out’ of revenues reported for Jun-17 quarter by incumbents was probably an illusion caused by a sharp rise in cross-network calls, while the actual underlying receipts from customers continue to fall – this is more important for profitability." They also said that 35-45% of Jio's market share gains has come from top-3 operators on a gross revenue basis. They also found that the traffic asymmetry between the new operator and the older ones is rapidly disappearing. While earlier, about 90% of the voice traffic on Jio's network was outgoing, it improved to 20% in January-March and further to 33% in April-June period, they said. "The improving traffic mix for Jio means ~60% of market share gains on AGR level are from top 3," it said. "Importantly, the growing share of incoming calls in Jio's offnet mix shows the network is being accepted by the industry's subscriber base, and maturing." The analysts said the overall loss of revenue in the industry is likely to have stopped. "Industry adjusted gross revenue as reported continues to decline – but including Jio numbers the industry revenues have bottomed out. Eventually when Jio starts reporting – this is what the govt will be focusing on with respect to their finances," they said.

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Reliance Jio hits 10% revenue market share – Credit Suisse