Airtel vs Jio : Who is winning the Subscriber war ?
Everyone is witnessing the rise of Jio. But was it that easy to beat a huge subscriber base of Airtel ? What really happened ? Well , we will go through the journey of the subscriber war of Airtel Vs Jio , so let’s get started.
Airtel foundation was laid in the year 1992 by Sunil Mittal founder of the Bharti Enterprise but technically it was year 1995 in Delhi where its operation got started after approval of the Government . He launched Airtel under Bharti Cellular Limited (BCL) and the rest is history.
Airtel grew significantly over a period of time and Bharti Enterprises went public in 2002 and got listed on Bombay stock exchange and National Stock Exchange . No one can forget that mesmerizing soundtrack of Airtel composed by A.r.rahman , still got that soothing vibration . Check this out here
Airtel good days were in the picture for quite a long time , many telecom operators came and tried to destabilize their market share but airtel subscriber base was established and in the game for long run , so it wasn’t easy for companies like Rcom which eventually got vanished from the competition after a switch of telecom industry from CDMA to GSM networks which they failed to deliver to their users of CDMA networks .
Other competitors like Vodafone were able to spread to the urban areas quite well but couldn’t beat the airtel stronghold in the rural areas also in the urban areas their base was quite firm .
But the picture is not over yet , who can forget the year of 2016 especially the telecom operators , where the Jio i.e. sub brand of Reliance made a grand big bang entry to destabilize the whole telecom sector altogether .
It was a huge aggressive operation to roll out Jio sim to all over India with a huge plan to gain new customers as well as taking away Airtel , Vodafone , Idea customers .
Mukesh Ambani’s Jio was ready to take over Airtel, Vodafone , Idea in telecom sector and lead in the telecom front by giving away sim card launching on 5th of September , 2016 as Jio’s welcome offer with giving away free internet data and voice calling till 31st December , 2016 which was later extended till 31st March, 2017 .
And that extended till June so one can see that almost 10 months of aggressive marketing strategy was in practise which definitely involved a huge sum of cost to be invested which can be considered as opportunity cost for gaining sim card users .
Indians love free things so Jio’s marketing strategy was going where the fish were and making them habitual of the services by giving away free internet data and later making them switch to them instead of using other telecom operators sim . One has never thought that there will be a long queue to buy a newly launched sim .
Looking at the pricing i.e. Rs. 399 for 84 days where one use to pay almost the same amount before the Jio era and get only 1gb the entire month with talktime charges as applicable.
It was a bloodbath for all the telecom operators and the listed companies could see the impact on their stocks as well as the investors were unsure of the future of Airtel , Vodafone & Idea after Jio’s entry . Jio tariff plans made the other operators follow the same path benefitting the indian consumers .
Airtel soon started following Jio’s footsteps with almost the same pricing as Jio’s in order to survive . They kept fighting for the customers they had but Jio’s mega war was taking away their subscriber base and Jio was gaining marketing share quite fast and extensively and by 22nd February 2017 , Jio’s subscriber base crossed 100 million which was the fastest in any part of the planet in such a short span of time . Jio provided complimentary apps like Jio cinema , Jio music , Jio Tv for free usage along with it .
Now it was not just limited to Airtel vs Jio subscriber war but the free internet data usage lure the users use more of Jio that lead to Airtel to decline to over 7% within the first two quarters and suffered a 72% percent decline decrease in its net income during the quarter ending
Airtel slowly started gaining momentum when the heat of the telecom war started getting slower . As Airtel came up with almost the same strategy with the Airtel Thanks plan within their tariff plans where they will provide Airtel’s Wynk Music , Xstream for free just like Jio’s services .
Though Jio became the largest telecom operator in India by 2019 , they were mostly tapped into the urban areas and only the 4g users where they were almost 200 million 2G &3G users of Airtel who were still left to be upgraded to 4G , so Jio reach was mostly in urban areas than rural areas , this is great a sign for them to be hopeful be in the game again .
Airtel foothold in the broadband connection was much better than Jio as they were still not into that segment till 1st half of 2019 and on the 3rd anniversary of Jio i.e 5th Sept, 2019 they announced the Jio Fiber broadband services they will be offering along with a setup box to tap into the Television satellite industry instead using Android media streaming player solely working on the internet .
Later they bought Hathaway who was the leader in the satellite tv industry so their plan was to disrupt this market as well .
this time Airtel was ready to not miss the train so they too came with Airtel Xstream by offering almost similar services so they don’t lose out the customer base this time .
So it is quite evident that there are only 2 players in the market in the telecom sector where Vodafone & Idea had to merge to survive as they were constantly losing out their customers to Jio and Airtel . Oligopoly is what it seems to be like .
And the recent data by Trai in Sept , 2020 shows that Airtel can give good returns and give a tough competition to Jio as recently Airtel added 3.8 million users to their active subscriber list whereas Jio added just 0.7 million.
And even in the broadband segment Airtel was leading adding 70 lakhs of subscribers and where Reliance Jio added just 17 lakhs much lower as compared to Airtel ,which is a great sign for the Airtel investors . Also the ARPU i.e. Average Revenue Per User of Airtel is 154 Rs and R.Jio’s is 130.6 .
The overall profitability is where Jio is leading in the telecom sector . So the game is not over yet , it is good for the Indian consumers to get access to internet data and voice calling at such cheap prices but it is not so feasible for the telecom operators like Airtel , VI so tariff plans are surely going to rise but anyways comparatively it is much cheaper than the pre Jio era.
And thus we are the leader in the world in data consumption , the highest anywhere in the world due to Jio’s such aggressive marketing campaign , we need to give credit Jio for that to make them affordable .
The war between Airtel vs Jio is not over yet as Jio has partnered with Google to launch a 100 million low cost android phone with the Jio data packs . So Airtel should be prepared for another war coming forward this December or early January 2021 .
The war has become interesting and hope the consumers and industry both get benefitted but monopoly should not be the way out . At Least 2 players must be there for fair practices .
Thank you and I hope it was worth your time . Keep exploring !
Bye . See you again in my next blog 😀
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