Ambani vs Mittal: A battle which heats up as Airtel overtakes Reliance Jio to become the top telco in the country

Bharti Airtel is going from strength to strength as it continues to step up in its attempt to catch up with Reliance Jio in the wireless industry. According to the latest data released by the Telecom Regulatory Authority of India or TRAI, Bharti Airtel added a record 3.77 million subscribers in September 2020, exceeding Reliance Jio by more than two times. Ambani-led Telco added only 1.46 million subscribers over the same period. Vodafone Idea (VI), on the other hand, continued to haemorrhage clients, losing 4.65 million subscribers. 

Let’s compare and critically analyse the telecom industry movements.

Airtel captures a wider market share

In the second half of the 2020 calendar year, Airtel’s good performance has helped it to maintain an upward trajectory in terms of market share. Though over 22 million shares were added by Airtel from July to December 2020, Jio managed to add just over 11 million shares. Since September, Airtel’s shares have jumped by more than 40 per cent as the telco continued to expand on its subscriber growth every month.

The stock market has yet to react to Airtel’s strong showing, however, as its shares were down by almost 1.3 per cent on February 19.

A Kotak Institutional Equities report dated February 18, 2021, reiterating its bullish position on the company stated, we like the calibrated approach of Bharti in shaping its offers of non-telecom digital services aligned with its homes and businesses, which is maybe under-appreciated for now but can drive significant growth in the medium term.

Net subscriber additions to Airtel were almost twice of Jio’s.

 According to the details released by TRAI, Reliance Jio still has a healthy lead in terms of total subscribers. It now has 404.12 million subscribers, giving it a more than 35% market share. Airtel leads with 326.61 million subscribers, while Vodafone Idea’s subscribers fell below 300 million for the first time since Vodafone and Idea were merged.

In the wireline section, Reliance Jio is fast catching up with Airtel. Though Bharti Airtel is returning in the wireless segment to winning ways, Reliance Jio now faces challenges in the wireline segment. According to the TRAI data, Reliance Jio has added over 3 lakh new landline subscribers, with the expansion of its Jio Fiber service being the reason behind it. On the other hand, Airtel has launched over 66,000 new customers, less than five times that of Reliance Jio. At the same time, BSNL and MTNL public sector telecoms together lost over 2 lakh subscribers. 

Currently, there are 4.4 million subscribers to Airtel, while Jio has 2.1 million.

Well, both the companies are giving each other a neck-to-neck competition while Vodafone Idea being outlined slowly. However, the rollout of 5G services is likely to give an edge to this intense battle.  

The Chairman of Jio also announced that in the second half of 2021, the Jio 5G launch will occur.

On December 8, Reliance Chairman Mukesh Ambani revealed that Jio would carry out 5G services in India by June 2021, marking a key milestone in the adoption of next-generation technology by the Indian telecoms industry. In the case of the 5G spectrum auction in India, there is a lack of clarification. Testing and eventual auctions were originally planned in early 2020, but policy delays and the breakout of the COVID-19 pandemic put the process under cold water.

The 5G spectrum auction is now scheduled to take place sometime in early 2021, with Bharti Airtel, a major telco. Interestingly, telco CEO Gopal Vittal said that if the reserve price is too high, the company would not bid for the 5G spectrum. The remarks were made in October during Airtel’s earnings call.

On the other hand, Ambani is urging the government to speed up the implementation of 5G. Speaking at the inaugural session of India Mobile Congress 2020, Ambani stressed the need for the government to speed up the early rollout of 5G. It needs to be affordable, he noted as well.

Ambani had also given four suggestions for India to become the largest digital economy in the world

Mukesh Ambani also highlighted the four ways in which India can become the world’s pre-eminent digital economy, in addition to highlighting the need for a fast 5G roll out.

1. Urgent policy moves to free the ‘trapped’ 300 million consumers in the 2G period

In India, 300 million mobile subscribers are still using 2G services, Ambani pointed out. As such, he urged the government to take steps to ensure an affordable smartphone for these consumers. This, he said, would encourage the 300 million users involved in India’s digital economy to participate. This will also mean that telecommunications firms do not have to maintain their legacy 2G networks, thus reducing costs and improving profitability.

2. 5G’s Early Roll Out

Ambani stressed that India is among the best countries in the world that are digitally linked. In order to ensure the lead, he said, the Indian government needs to ensure that 5 G services are deployed early. He also pointed out that, as India is a price-sensitive market, 5G services would have to be affordable. The government will definitely have to ensure that 5G spectrum rates are not steep toward this end. Ambani has said that in India, Jio would “pioneer” the 5G revolution. In the second half of 2021, the rollout will take place, but this will rely heavily on success in the 5G spectrum auctions. He said that the 5G network of Jio would be operated by components of indigenously built networks, hardware and technology.

3. Once proven in India, Jio will export its homegrown solutions

Ambani added that once proven in India, the Jio Platforms bouquet of services, which includes more than 20 start-up partners, will be provided to the rest of the world. Services from fields such as education, health care, financial services, new trade, and infrastructure are part of the Jio Platforms family.

4. In crucial areas like digital hardware, India cannot rely on imports.

He also pointed out that in sensitive areas, such as digital hardware, India cannot rely on imports. He said he expected that India will become a big hub for the state-of-the-art semiconductor industry. For all electronics firms, semiconductors are a vital piece of the hardware puzzle.