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videos | IST

Jio and Airtel will gain market share; expect Vodafone to lose 15-20 million customers a year: Fitch Ratings

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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.

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.