Reliance Jio may continue to disrupt the market till it achieves its critical mass of subscribers

According to a new report by research firm India Ratings, Reliance Jio Infocomm Limited may continue to disrupt the market till it achieves its critical mass of subscribers.

RJio's quest for incremental market share could likely slowdown at around 30 percent market share (currently subscriber market share at 14.6 percent; revenue market share at 15 percent), it said.

RJio was at third place by subscribers' position in four out of eight top circles in February 2018. Bharti Airtel Limited maintains the leadership position in six out of the top eight circles, whereas Vodafone maintained the number one position in Maharashtra and Gujarat circles in February 2018. Vodafone and Idea Cellular Limited on a combined basis would be at first place in Uttar Pradesh East, Maharashtra, Gujarat and Tamil Nadu circles in February 2018, the firm added.

Meanwhile Jio recently said that it continues to be the most popular wireless broadband service provider in the country with its subscriber base increasing from 160.1 million as of 31-December-2017 to 186.6 million as of 31-March-2018 and net subscriber addition for the Company during the year 2017-18 was at 83 million, which was the highest in the industry by a substantial margin.

Subscribers continue to demonstrate high activity level with average data consumption per user per month of 9.7 GB and average voice consumption of 716 minutes per user per month while video consumption is at over 240 crore hours per month on the network, telco added.

The rating firm also pointed out that Indian telcos are not in a position to spend large CapEx required for 5G in 2018.

Subscriber growth was negative in January 2018, led by a closure of services by Reliance Communications Limited and scaling down of services by Aircel Cellular Limited.

It said that the already high debt levels, pressure on EBITDA, currently low level of 4G penetration and focus on completing consolidation will defer the 5G investment in India beyond 2020. Adding that pricing for the 5G spectrum will remain a deciding factor for telcos to make further investments such as in Massive MIMO (multiple inputs multiple outputs) - 5G plug-in technology, cloud radio access network, network virtualization, to evolve its existing 4G networks to 5G which significantly improves spectrum efficiency.