Reliance Jio revenue market share to fall in next 3 years: UBS report

Reliance Jio’s share of revenues will be 5.7% in 2017-18 and will gradually increase to 9.8%, which is below previous estimates, by 2019-20, a UBS report said


Of the 1,504 people interviewed, 31% are using Reliance Jio, implying a Jio penetration of around a third of all users.
Of the 1,504 people interviewed, 31% are using Reliance Jio, implying a Jio penetration of around a third of all users.

New Delhi: Smart pricing by rivals will check the advance of Reliance Jio Infocomm Ltd, UBS Global Research predicted.

The Zurich-based securities house now expects Reliance Jio to win a lower revenue market share in the next three years than it earlier thought. Jio’s share of revenues will be 5.7% in 2017-18 and will gradually increase to 9.8% by 2019-20, it said in a 27 April report.

“This is below our previous estimates as the results of UBS Evidence Lab survey and our on-ground tariff checks suggest incumbents are narrowing Jio’s value for money proposition by launching their own packages priced at only modest (15-20%) premium to Jio,” the report said.

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“We have lowered Jio’s RMS (revenue market share) estimates for the next 3 years by 1-2 percentage points given the above,” it said.

UBS Evidence Lab provides primary research for UBS Global Research analysts through representative surveys of decision-makers. It also collects data, and pulls out innovative information from its surveys. For this report, UBS Evidence Lab conducted an online survey of 1,500 respondents in India in eight cities in different states. The survey was conducted between February and March 2017.

Overall satisfaction levels with Jio’s services were high and 70% of Jio subscribers will likely sign up for the Jio Prime offer, UBS said in the note.

“That said, Jio did rank below incumbents on ‘network coverage’, ‘network reliability’, ‘voice quality’ but ranked at par or slightly ahead on ‘data speeds’ and came out higher on ‘value for money’,” it said.

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Among the REliance Jio users, around 64% customers are very satisfied and another 31% are “somewhat” satisfied with the service, implying an overall high satisfaction ratio.

“When we limit this analysis to the ~15% active Jio users, the satisfaction levels are even higher at 72%. Indeed, Jio’s satisfaction levels are higher than other incumbents and almost comparable to Bharti,” UBS said.

An email sent to Reliance Jio seeking comments remained unanswered.

The results of the survey show highest satisfaction levels on Airtel among the incumbents, with best performance on parameters such as network coverage and reliability, which are highlighted by customers as the most important in deciding upon service providers.

“The company has continued to complement its already strong spectrum footprint by acquiring Telenor and Tikona which will enhance its 4G spectrum holdings vs peers,” UBS said.

Of the 1,504 people interviewed, 31% are using Reliance Jio, implying a Jio penetration of around a third of all users. All the respondents were smartphone users, so the survey is clearly more focused on mid/high income consumers in urban centres.

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