Telecom giants are currently locked in a fierce competition against each other in the Indian market. After almost two years of trying to appease users, the companies have started looking at a way to increase their revenue. A recently released report revealed that the industry will take some time to recover after intense competition. The report also noted that one of the primary reasons for recovery is the stability in data tariffs in the last one year. It also stated that Bharti Airtel seems to have overtaken Reliance Jio in terms of monthly data usage per user. Also Read - Airtel offering Rs 1,000 cashback on its 4G hotspot device: Here is how to claimAlso Read - Airtel TV is now available on the web as well; offers more than 100 live TV channels
The report by India Ratings and Research shared different statistics to paint a comprehensive picture of the industry. The agency clarified that the recovery may continue but at a slower pace. Moving back to monthly data usage, we see that Bharti Airtel users are consuming about 11 GB of data per month. This increase in data usage with increasing rates is likely to make it easier for Airtel to recover. According to the statistics, the data tariff increased between 11 to 17 percent after a steady form for more than 2.5 years. Looking at the data tariff, Jio has continued to offer data at a discount of about 25-30 percent to the competition. This discount has helped Reliance Jio to continue to gain market share in an aggressive manner. The shift in market share indicates that the competition has not really gone anywhere. Also Read - Airtel debuts Rs 148 prepaid recharge plan; offers unlimited calling, 3GB data and more
Bharti Airtel focusing more on the revenue
A number of recent moves from Bharti Airtel indicate that it is not really looking at the number of subscribers. Instead of focusing on the market share, Airtel seems to be trying to increase the average revenue per user (ARPU). In fact, other telecom players including Vodafone Idea have also followed Airtel by increasing their rates.
However, the report noted that this increase in revenue and profitability will not really solve the primary issues. India Ratings and Research agency also highlighted these issues including high leverage and negative free cash flow. The report also talked about other problems including elevated Capex and the need to monetize the assets.