Why Is Reliance Jio Losing Subscribers And Market Share?

Airtel added 6.9 million new subscribers in January, while Reliance Jio added only 3.4 million users. This means Airtel is extending its market share and is serving 334.60 million wireless users as per TRAI data. Besides, Jio's market share has been decreased to 35.30 percent from 35.43 percent in December 2020, whereas Airtel increased its market share by 29.62 percent from 29.36 percent in December 2020.

Moreover, Reliance Jio is also behind Airtel in terms of active users. Reliance Jio has 324.52 million active users, while Airtel has 335.77 million subscribers. "While we cannot definitely conclude, the jump in Visitor Location Register (VLR) additions in Nov'20 and Dec'20 could have been driven by migrant workers coming back to cities, the effect of which could have normalized on January 21," JM Financial Group said.

You'll be surprised to know that Airtel has been adding more subscribers for several months. So, why is Reliance Jio is lacking in adding new users, despite it is the number one telecom player in the industry?

Reliance Jio Losing Subscribers And Market Share: Check Details

Earlier, Reliance Jio used to charge for outgoing calls, but now the network is the main issue as several customers are complaining about the call drops. This shows that subscribers are looking for better services and networks that's why Reliance Jio's active subscribers are less than Airtel. However, the situation has been changed as Jio spent a lot in the spectrum auction.

Reliance Jio Bought More Spectrum During The Auction: Check Details

Furthermore, Reliance Jio is the only telecom operator that bought 488.35 MHz spectrum in bands like 800 MHz, 1800 MHz, and 2300 MHz. The telecom operator spent Rs. 57, 122.65 crores for buying the airwaves. This means Reliance Jio ahead of Airtel and Vi (Vodafone-Idea) in terms of buying the spectrum in the auction.

Even though Reliance Jio purchased more spectrum in the auction, it is behind Airtel and Vi as both are holding 2,107 MHz and 1,768 MHz. On the other hand, Reliance Jio is holding only 1,717 MHz, which is less than the other two operators. So, this could be a reason why Jio users are facing network issues.

"Overall, we believe that Jio has bid aggressively to bridge the gap between spectrum market share and subscriber market share as it was facing network constraints with strong subscriber growth over the last three years," said a Credit Suisse report.

Why Reliance Jio Is Investing In 5G And More Spectrum

In addition, there are high chances that Reliance Jio is no longer interested in investing in 4G as the operator bought more spectrum during the auction and might start investing in the 5G network. This seems that Reliance Jio could use a new spectrum for the 5G rollout. It also indicates that Reliance Jio's investment in the spectrum might help the operator to improve the network issues and attract new subscribers to its platform. Besides, this spectrum auction will give Reliance Jio an upper hand on the spectrum.