The telecom data for the month of October shows that Bharti Airtel has added more subscribers than Jio for the third consecutive month. Vodafone-Idea, however, continues to lose market share as well as subscribers.
Nitin Soni, Senior Director-Corporates at Fitch Ratings, said that Jio is already coping with a large subscriber base and is now focused on high quality customers.
“Jio having already garnered about 405 million customers, their network is coping with a large subscriber base. We believe that they are now focusing on high-quality customers rather than going for low average revenue per user (ARPU) customers. That is the reason why we are seeing that Bharti Airtel is gaining a bit more revenue market share,” he said in an interview to CNBC-TV18.
However, he believes that Jio has better market execution compared to its peers. “The market execution of Jio far exceeds the other telcos. Maybe it is a matter of one or two quarters, but I think Jio could come back and have a better market execution and will gain subscriber base,” he said.
Soni expects Vodafone-Idea to lose about 15-20 million customers each year going forward. He also believes that the $3.4 billion fund raising by the company is insufficient to restore its competitive position.
“For the size of this telecom company, they need to invest anywhere around $2-3 billion a year on capex to remain at a stable position and compete effectively against Jio and Bharti.”
On tariffs, Soni said that a price hike is imminent and he expects industry ARPU to reach around Rs 190-200 in the next 12 months.
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Disclosure: Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes CNBCTV18.com.