Even as the telecom industry continues to reel under competition from billionaire Mukesh Ambani-led telecom venture, global fim CLSA estimates that Reliance Jio’s subscriber base will soar to a whopping 414 million by the year 2020.
Even as the telecom industry continues to reel under competition from billionaire Mukesh Ambani-led telecom venture, global fim CLSA estimates that Reliance Jio’s subscriber base will soar to a whopping 414 million by the year 2020. The firm, which is making deep inroads into the rural markets is estimated to garner 150 million Jio phone users by that time. Notably, the telecom firm completed 2 years just last week and has garnered 215 million subscribers, and seeks to capture 50% of telecom market by 2020. Recently, the company said that it aims to achieve another 100 million in 15 months.
According to CLSA, the subscriber base of 414 million in 2020 would be equal to 45% of India’s population in the 14-to-80 years age group. Further, the firm estimated that the telecom and retail businesses will contribute as much as 80% to the parent’s consolidated EBITDA growth through FY18-21. Interestingly, CLSA has also raised its target price on Reliance Industries Rs 1,500 from Rs 1,350 earlier, after removing the holding company discount. Conglomerates generally face a holding company discount, as the value of holding companies are usually at discounts to the value of all the subsidiaries.
Just last week, RIL’s telecom upstart Reliance Jio completed 2 years. “Everytime a stronger player comes in the marketplace, you try to get better, sharpen your skills, take out waste, you increase customer focus, that’s what all good companies do. These last 2 years, have reshaped the landscape of the industry, 7-8 companies have gone away by way of closures or bankruptcies. So, you’ve seen a complete rewriting of the order of the market. In that, companies like Airtel have shaped themselves as much more leaner, and a fighting fit machine than ever before,” Sunil Mittal of Bharti Airtel told in an interview to ET Now, taking stock of the disruption caused by Reliance Jio.
Reliance Jio, riding on its cheaper tariff plans compared to its industry peers, hit 100 million subscriber-mark in the first 170 days of its launch. Reliance Jio’s standalone net profit increased 19.9% to Rs 612 crore for quarter ending 30 June, 2018, as against the preceding quarter.