Mobile calls in our grandfather’s time was an unforeseeable invention. Some kind of magical, charismatic wand that could do wonders just at the click of a few button. The call generated from one part of a village, that landed up in a nearby town was seen with deep respect, a kind of awestruck at the banter that one could witness. The phone call was a luxury then, where people could only assume yet not afford these epiphanies. Over the years, with rapid growth and infrastructure, the phone rates fell. Calls became cheaper, monopoly of the few telecom giants vanished and the market grew a little more liberal. Then came the advent of mobile internet, which set in gears the next phase of evolution of this technological innovatory cycle.
The mobile data now costed equally expensive as the phone calls in the initial days. People consumed such high esteem goods with great delicateness, maximising the use of broadband, and consequently Wi-Fi. But things were soon to change. Progressing from 2G we found peace in 3G. Burdened by 3G we found comfort in the finest 4G. As our needs and desires grew, so did the types of network. All was steady, the profits were fine, the monopoly bosses were satisfied. But then came their unpredictable nightmare, Mukesh Ambani who could successfully overthrow the entire game board in a single announcement. All this has given rise to great Indian telecom battle.
The Great Indian Telecom Battle
The advent of Jio about three years back, made telecom battles breath a new life. Data & calling that costed a fortune in the early days, now are sold dirt cheap. Every now and then we see an offer and a counter-offer. Cut-throat market reactions make price wars inevitable. This much data for this much price. This much unlimited for this much limited. Freebies distributed with burning cash. Declining profits defining CEO dreams. Amidst such a fiery Battaglia battle, it would be unfair to not compare the monopolists. Here we give you a restless comparison of Vodafone Idea v/s Reliance Jio:
Note: As far as the Pricing is concerned, both companies have priced their services almost at the same level
Vodafone Idea has the largest user base. It has about 84.8 million 4G subscribers as per a month-old statistic. Jio in contrast has about 331.3 million 4G subscriber which is straight 4G, while its rival has an intermix of 2G, 3G & 4G subscribers.
Despite more subscriber, Vodafone-Idea has posted a revenue of Rs.11,269.9 crore in recent quarter, while Jio had a marginally higher revenue of Rs.11,679 crore. Airtel although is yet to announce its results.
ARPU (Average Revenue Per User)
ARPU for Vodafone Idea is steadily climbing. This is so, because with the onset of Vodafone-Idea’s monthly minimum recharge plans, its subscriber base has shrunk increasing ARPU to Rs. 108 from Rs.104 in the previous quarter. For Jio the news is negative. Its ARPU is dropping. From a peak of Rs.154 in December 2017, it has gradually shrunk to Rs.126.2 in previous quarter and Rs.122 in this quarter This could be an issue for the long run sustainability.
ARPU = Total Revenue/Total Subscriber Base
Vodafone-Idea has made a net loss of Rs.4,874 crore in the quarter of June. Jio made a net profit of Rs.891 crore. Although Vodafone is in between a merger exercise, where it believes that its corporate strategy is not presenting itself too soon and expects better performance in the days to come.
The actual picture of who wins the telecom battle, doesn’t really matter as long as the customers can sit back and cherish the cheap tariffs, to let the corporate creed do the thinking.