The country’s data market will touch Rs 3 lakh crore by 2020-21, newcomer Reliance Jio has estimated, while claiming it is “well positioned” to achieve over 50 per cent revenue market share. However, some industry analysts have dubbed Jio’s market share assumption “aggressive”. “Voice revenues will shift to data. Data market in India will be Rs 3 lakh crore by 2020-21,” Reliance Jio said in its latest investor presentation.
Stating that it currently caters to 85 per cent of mobile data traffic in India, Jio said that bulk of its network is “already built” and can support more than 60 per cent of estimated 2020-21 India data demand.
In its presentation, Jio further said that nearly 400 million subscribers can afford to spend minimum of Rs 500 on digital services.
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“Jio is India’s only 5G ready network due to its elastic network and deep fiber,” the presentation said, adding it is “well positioned to achieve more than 50 per cent revenue market share.”
Jio also anticipates its EBITDA margin to be more than 50 per cent on its gross revenue.
Underlining an impending shift in industry’s revenue mix, it said that there would be a revenue transition from voice to data in 1-2 years.
Voice revenue will reduce from Rs 1.5 lakh crore to Rs 0.5 lakh crore, it said and added “Shift of Rs 1 lakh crore from voice will take data revenue to Rs 1.3 lakh crore.”
Industry growth was “low” in the last five years but the next five will see rapid growth with data explosion, it said.
“Overall industry revenue to grow to Rs 3 lakh crore by 2020-21…leading global consultants have forecasted demand for data at 500-600 crore GB per month. At yield of Rs 50/GB it translates to Rs 3-3.6 lakh crore per year. (This is) equivalent to 1.35 – 1.6 per cent of projected GDP (still lesser than 2.5 per cent in developed economies,” it said.
Indicating consolidation of SIM cards, it said their number will come down to 0.8 billion from 1.13 billion.
Some analysts, however, said the figures given by Jio are “aggressive”.
Goldman Sachs acknowledged that while a shift from voice to data may be faster than its current expectations, “it is unlikely incumbents will lose a meaningful portion of their revenues as they too have invested quite aggressively in building out their data network”.
“We view Jio’s market share assumption of 50 per cent as aggressive,” it said.
Credit Suisse too said it finds targets for both industry revenues and Jio market share “aggressive”.
“We find targets for both industry revenues and Jio market share aggressive…this level of Average Revenue Per User (ARPU) expansion has never been seen globally…(there is) intense competition as Jio try to gain this share can keep ARPUs depressed,” it said.