The growth of Reliance Jio subscriber base and its free offering till the end of fourth quarter of 2016-17, has led to a 11.7 percent year-on-year decline and 8.5 percent quarter-on-quarter drop in industry revenues.
Reliance Jio effect was also evident in the decline being maximum in metro and A circles where Reliance Jio has a higher penetration, and where the smartphone ecosystem is better developed, Jefferies said.
Jio has continued to increase its subscriber base steadily to over 108 million by the end of fourth quarter of 2016-17 with active subscriber base of 80 million. The most recent month has seen a slowdown in additions, primarily on the back of a limited 4G device ecosystem.
Total 4G smartphone installed base of 131 million in India implies that Jio is penetrated into 86 percent of the devices (61 percent by active subscribers).
The higher growth from data services, decline in voice and the lower investments made by operators outside the top three has started showing up in steeper decline in revenue for them.
The Top-3 combined have 76 percent revenue market share in the industry. This decline in smaller operators would be extrapolated to industry consolidation.
“However, we think India will remain a five player market at best, with three equally strong competitors (Bharti Airtel, Vodafone-Idea combined, Reliance Jio) being as bad for incumbents as a fragmented market at present,” the report added.
