Ever since Reliance Jio Infocomm Ltd launched services in 2016, revenues of India’s wireless industry have been on a steady decline. The only exception was the June-September quarter of 2017, when Reliance Jio started reporting revenues, and more than made up for the drop in revenues of other telecom firms.

The April-June quarter this year was another instance where Reliance Jio’s incremental revenues made up for the drop in others’ revenues. Wireless revenues rose by about 1% sequentially last quarter, a report by JM Financial Institutional Securities Ltd points out, based on revenues reported by telcos to the Telecom Regulatory Authority of India (Trai).

“Underlying wireless spending stabilised in Q1. Assuming no further tariff cuts, wireless spending is unlikely to decline materially from here," analysts at JM Financial said in the note to clients.

But while there may be signs of some stability, not all telcos are experiencing a state of calm.

Reliance Jio is clearly miles ahead of others in terms of revenue growth—its Q1 revenues grew 14%. Among the incumbents, Bharti Airtel Ltd was relatively better off with revenues growing by about 1% last quarter. Idea Cellular Ltd and Vodafone India Ltd reported a 4% and 2% drop in revenues, respectively.

According to JM Financial, the Idea-Vodafone combine’s revenue market share has dropped from 42.4% a year ago to 34.1% currently. This is using the sum of adjusted gross revenues (AGR) in the wireless business and AGR in national long distance, which also captures revenues related to the mobile business. Reliance Jio, meanwhile, has raced from zero to a 22% share in the same period.

If revenues related to non-mobile businesses, such as fixed line, are knocked off using rough estimates, Reliance Jio’s share rises to 23.5%, say analysts.

With most other telcos having exited the market, analysts now expect Reliance Jio’s market share gains to come at the expense of Vodafone Idea. This is simply because the two companies are still far behind Reliance Jio and Airtel in terms of network investments.

A pertinent question, therefore, is, will the stability in revenues seen in the June quarter continue going forward. After all, what stops Reliance Jio from getting more aggressive to gain market share at a time when the two companies are still busy completing their merger?

Of course, much depends on Reliance Jio’s attempts to make inroads into the post-paid segment and the feature phone segment.

If the response to the company’s new offers in these segments is lacklustre, the industry may well have to prepare for another round of downtrading.

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