Close contest between Reliance Jio & Bharti Airtel, says report

Mumbai: Bharti Airtel and Reliance Jio are neck and neck in terms of active mobile subscriptions, and hence the industry is unlikely to see any unanimous tariff hikes in 2021-22, a report said on Tuesday.

Domestic credit rating agency Crisil's research wing pointed out that there is a close contest between the top two telcos, when one goes by active subscriber base with Jio's share at 33.7 per cent and Airtel's at 33.6 per cent.

The active subscriber market share data indicates the top two players are neck and neck, with neither ready to bite the bullet and raise tariffs, it said.

The build-up in competitive intensity also indicates that the industry is unlikely to see unanimous tariff hikes at least in the near term, limiting a large upside in average revenue per user (ARPU) in fiscal year 2022, it added.

The report said there is an universe of 250-300 million active non-4G subscriber base, which will be on the radar of the telcos for conversion to 4G users in order to increase revenues. While competition to attract this user base did exist before, inadequate spectrum and 4G coverage made operators err on the side of caution, it said, adding that with the recent spectrum acquisition, telcos are well-positioned to handle any surge in data traffic, leading to increased aggression by the players to gain market share.

However, a price war like the one seen before 2019 is unlikely and competition will be indirect in the form of tie-ups with smartphone manufactures for low-cost phones, increased bundling of over the top (OTT) content and lower entry points for upgrade customers, the report said.