Jio Loses Revenue Market Share to Airtel in Several Circles
Jio is facing a decline in its revenue market share in several key circles, including Delhi, UP West, UP East, Himachal Pradesh, West Bengal, Bihar, and Kolkata. This loss comes as Airtel gains ground in these areas, with the bulk of its market share gains in Q1 coming from Delhi, Bihar, and West Bengal.
Despite the lack of major tariff changes by telecom companies, the adjusted gross revenue (AGR) in the sector rose by 7.2% year-on-year to Rs 61,400 crore in the first quarter (April-June) of FY25. This growth surprised analysts who had expected a slower pace due to the absence of significant price hikes.
Analysts predict that the sectoral revenues will continue to grow at a healthy pace, reaching $38 billion by FY26. This growth will be driven by market share gains for Airtel and Jio, with the sector expected to witness a compounded annual growth rate (CAGR) of 15%.
While average subscriber growth moderated slightly to 2% year-on-year, slower growth in Average Revenue Per User (ARPU) of 5% year-on-year resulted in a moderation in revenue growth.
In terms of revenue market share (RMS), analysts expect gains to remain tilted towards Airtel and Jio until Vodafone Idea (Vi) completes its network investments into 4G and begins its 5G rollout. Currently, Jio holds 42.7% RMS, followed by Airtel's 38.3% and Vi's 15%.
The convergence in growth between Bharti and Jio is likely to keep pricing disciplined, as tariff differentials are not contributing to growth differentials. However, it is important to note that Airtel's circle-wise revenue is not directly comparable due to changes in revenue recognition under NLD/circle, which increased circle revenues for Q1.
Overall, the telecom sector is showing positive growth despite the absence of major tariff changes. Airtel is gaining ground in several key circles, while Jio is facing some challenges in maintaining its market share. The future growth of the sector will be driven by market share gains for Airtel and Jio, with analysts predicting a CAGR of 15% by FY26.