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<ul><li> VIL lost market share in 14 circles whereas JIO gained market share in these circles. </li><li> Jio’s revenue market share is at 31.7% which is in striking distance of <keyword id="15492" type="CITY" weightage="20" keywordseo="Vodafone">Vodafone</keyword> <keyword id="41511" type="CITY" weightage="20" keywordseo="idea">Idea</keyword>’s 32.2%. </li><li>CARE recently downgraded VIL’s long-term debt to A- from AA-, with a negative outlook. </li></ul>What does it mean to be the top telecom service provider in India? The finish line in the race between Jio, Vodafone Idea (VIL), and Airtel is at the halfway mark. Mukesh Ambani’s Reliance Jio is looking to attain a 50% share in the total telecom sector’s revenue. The company that brought in predatory pricing is looking to bite off half of the telecom pie, which will probably make it powerful enough to alter the pricing structure of the market. Whether they will be able to do it or not will be determined in the next four to five quarters, which is when Emkay Brokerage predicts it will achieve it. Jio’s revenue market share without including national long distance is at 39.8%. Vodafone Idea has a share of 28.9% and Bharti Airtel is at 24% for the fourth quarter. However, when including national long distance, Vodafone is the market leader with Jio close behind. Vodafone is ceding the most of its territory to Jio. “VIL lost market share in 14 circles which contribute 50% of its total AGR (adjusted gross revenue), whereas JIO gained market share in these circles,” said a recent report on telecom sector by Emkay Brokers. What’s more worrisome is that Vodafone Idea is losing share in its traditionally strong circles of Mumbai, Tamil Nadu, Uttar Pradesh-East and Andhra Pradesh. These four leadership circles contribute to 28% of the merged company’s revenues. In the meanwhile, Jio found a niche in B and C circles, like Madhya Pradesh, West Bengal and Bihar amongst others. Not only does it command number one position in the circles, they contribute to more than half of Jio’s revenue. Yet, Jio is not gaining ground as fast as it did, earlier. “The intensity of RMS gains has decelerated due to slower revenue growth,” Emkay said. A Negative Outlook It is this manner of extreme competition which has worried rating agencies too. CARE recently downgraded its long-term debt to A- from AA-, with a negative outlook. “The negative outlook continues to factor the moderation of operational performance amidst intense prevalent competition in Indian telecom Industry. The competition in the industry has intensified leading to decline in realizations,” CARE said in its report. Improving Margins Vodafone Idea however is setting the stage for improving its margin even in an era where prices for 3G data fell drastically since Reliance Jio’s entry. It introduced a minimum recharge plan of Rs 35 for 28 days, and it lost 53 million subscribers in the fourth quarter. The customers which it lost were those who were using the number for incoming calls only or barely using it. As a result, its average revenue per user (ARPU) went up to ₹104 from ₹89 a quarter earlier. In spite of small victories, Vodafone Idea is a long way from withstanding the onslaught of Reliance Jio’s aggressive tariffs. And Vodafone’s fate will also depend on when, how it will win the price war. “The outlook may be revised to Stable in case it is able to withstand the competition in a more resilient manner and demonstrate improvement in operational and financial performance indicators,” CARE said.

The magic number that Vodafone Idea, Airtel and Jio are chasing is 50

New Delhi, Jun 17 () Mukesh Ambani's Reliance Jio is likely to capture 48 per cent of Indian mobile subscriber marketshare by 2025 with over half a billion users, Bernstein said in a report on Wednesday. "At our last model update in December, we proclaimed Reliance Jio the new king of Indian telecommunications. Since then, we have seen a multitude of international investors reach the same conclusion," the analyst said in the report. Facebook kicked-off the party, investing Rs 43,573.62 crore to secure 9.99 per cent stake. This was closely followed by a further Rs 60,753.33 crore in investment spread across eight different private equity investors. All together Reliance Industries has monetised 22.38 per cent of Jio Platforms and raised Rs 1.04 lakh crore in the process. "While we expect strategic cooperation between Facebook and other parts of the Reliance Group, we believe most of the other investments are passive. Reliance gets access to much needed capital to assist in paying down debt, and these investors get early access to the leading telco platform in India," it said. Bernstein expects an initial public offer (IPO) of Jio sometime over the next few years as its market share approaches 50 per cent. "By then ARPUs (average revenue per user) will have improved and we expect service revenue will double over the next three years." It projected Jio's mobile subscriber base to cross 500 million mark in FY23, up from 388 million in FY20. The subscriber base is expected to touch 569 million in FY25 and 609 million in FY28. Jio's market share is expected to rise from 36 per cent in FY20 to 40 per cent in the current fiscal and to 48 per cent in FY25, it said. "Based on our updated model, we see potential upside of 30 per cent by FY25 at fair value. Returns will likely be higher as retail investors clamour to get a slice of what will be the undisputed scale player in Indian telecoms," it said. With all the positive news regarding investments in Jio Platforms one expects to become more optimistic regarding the value of the company. "Instead we have become slightly more pessimistic about the near-term and have taken down our numbers," Bernstein said. The key reasons, it said, was COVID-19 and the resulting shutdown that has likely reduced the rate of gross additions to the platform and call an data price increases in December have a more muted effect on Jio's ARPU than rival Bharti Airtel's. Jio ARPU rose from Rs 128 in October-December 2019 quarter to Rs 131 in January-March 2020. In comparison, Airtel's ARPU rose from Rs 135 to Rs 154, it said. "We think lower value JioPhone users having already increased their telco spend (to increase their data allowance) may have found further increases harder to absorb," it said, adding that post these changes, it forecasts Jio to reach 48 per cent subscriber market share and 44 per cent revenue market share by 2025." ANZ ANS ANS

Jio to capture 48% market share by FY25: Bernstein

<keyword id="3690255" type="General" weightage="100" keywordseo="jiofiber" source="Orion">JioFiber</keyword> added 0.19 million subscribers to become the number 1 operator in the fixed broadband segment in just about two years from commercial launch, with 4.34mn FBB subs. JioFiber's market share improved 85bp month on month to 16.9 per cent (launched commercially in Sep-19), Nomura said in a report. Bharti added 0.1mn subs to reach 4.08mn FBB subs (up 68% since May-20), with market share up 60bp m-m to 15.9 per cent. <keyword id="57998" type="General" weightage="20" keywordseo="bharat-sanchar-nigam-limited" source="Orion">Bharat Sanchar Nigam Limited</keyword>'s (BSNL) market share further declined by 185 bp to 16.4 per cent share (vs 44 per cent pre-JioFiber launch in September'19), the report said. Without significant fund-raising, Vodafone Idea's network investments and 5G rollout would likely remain constrained, at least in the near term. Hence, we expect market share gains to continue for Bharti and R-Jio, the report said. TRAI data for November shows a slight improvement in industry numbers, with Jio gaining market share at the expense of VIL, UBS said in a report. After a large decline in September (driven by the 19mn subscriber loss reported by Jio) and flattish numbers in October, the industry witnessed a slight improvement in November, with overall subscriber base expanding by 1.2mn. Bharti gained 1.3mn subs (-0.5mn in Oct), Jio added 2mn subs (+1.8mn in Oct), while VIL continued to lose market share: it lost 1.9mn subs (versus loss of 1mn and 1.1mn in Oct and Sept respectively). Jio remains the market leader, with a subscriber market share (SMS) of 36.7 per cent (+10bps). Bharti and VIL ended Nov with SMS of 30.4 per cent (flat MoM) and 22.9 per cent (down 20bps) respectively. It is important to note that the tariff hikes were largely applicable from end-November / December, and therefore, December is likely to see some churn, UBS said. In fixed broadband, Jio surpassed BSNL to become the country's largest FBB provider. Jio now has 4.3mn FBB subs (+0.2mn in Nov), followed by BSNL with 4.2mn subs (-0.5mn in Nov) and Airtel with 4.1mn subs (+0.1mn in Nov). SEE ALSO: <a href="https://www.businessinsider.in/tech/news/best-broadband-plans-in-india-in-2021-from-jio-fiber-airtel-and-other-services/articleshow/82064580.cms">Best broadband plans in India in 2021 – JioFiber, Airtel Xstream Fiber and ACT Fibernet</a> <a href="https://www.businessinsider.in/business/telecom/news/jiofiber-launches-six-new-quarterly-plans-prices-start-at-2097/articleshow/86028163.cms">JioFiber launches six new quarterly plans, prices start at ₹2,097</a>

JioFiber adds 0.19 million subscribers, overtakes BSNL to become largest fixed broadband provider

<ul><li>Airtel has been one of the resilient stocks over the last few months even as the AGR issue and Coronavirus-fueled market crash has wiped off lakhs of crores of investor wealth.</li><li>The Airtel stock could rally thanks to the Jio-Facebook deal and the weakening of Vodafone Idea.</li><li>The Airtel stock has been given a ‘Buy’ rating with a target price of ₹606, which is an upside of more than 20%.</li></ul>Airtel was the market leader before the arrival of <keyword id="6354504" type="DEFINITION" weightage="20" keywordseo="reliance-jio">Reliance Jio</keyword>, but it has since <a href="https://www.businessinsider.in/business/corporates/news/mukesh-ambanis-reliance-jio-becomes-the-largest-telco-by-revenue-and-subscribers-as-industry-shows-signs-of-recovery/articleshow/73667566.cms">ceded its lead position</a> to the Mukesh Ambani-owned telecom company. However, the gap between the two leading mobile service providers may be too huge, according to market experts. When it comes to the market cap, though, Airtel is 1.6 times smaller than Jio. Vodafone Idea, on the other hand, is 39 times smaller than Jio, which is currently valued at ₹4.4 lakh crore <a href="https://www.businessinsider.in/business/news/jio-a-3-year-old-telecom-company-is-now-bigger-than-hdfc-infosys-and-itc-and-indias-largest-bank/articleshow/75290132.cms">after the Facebook deal</a>. <div type="image" title="Jio market cap telecom companies" msid="75533839" hostid="261"></div> <div type="Article" hostid="261" msid="75290132" title="Jio, a 3-year old telecom company, is now bigger than HDFC, Infosys and ITC – and India's largest bank" mstype="2" mssubtype="0"></div> Analysts suggest that Airtel has been one of the more resilient stocks in the market even as the economic downturn and Coronavirus crisis have wiped lakhs of crores of investor wealth. Its strong financials, the weakening of Vodafone Idea and the Jio-Facebook deal have all contributed to Airtel’s stock scaling back to its 52-week high of ₹568. <div type="image" title="Airtel stock 01_01_20 to 04_05_20." msid="75533863" hostid="261"></div> “Airtel has been able to raise funds to meet current AGR demands. In the short-term, Airtel will be the beneficiary if there is any weakening of Vodafone Idea,” said Mahesh Uppal, Telecom Analyst &amp; Director, Com First India told Business Insider. “It is often forgotten that, in general, Airtel and Vodafone, being early entrants to the market, have a higher quality of subscribers, in terms of paying capacity, than their competitors. If the AGR issue does not get resolved to the comfort of Vodafone Idea, Airtel will be best placed to benefit,” he further added. "Expects positive for Bharti Airtel after US based fund Silver Lake partner bought Reliance Jio stake at a premium. Higher valuation on Reliance Jio may positive on Bharti Airtel," <a href="https://twitter.com/MotilalOswalLtd/status/1257514187766460416" data-type="tilCustomLink" style="">said</a>Motilal Oswal. AGR, short for adjusted gross revenue, is a revenue sharing agreement between the Indian government and the telecom companies. According to this agreement, the telecom companies have to share a percentage of their AGR as annual license fee and spectrum usage charges. The Supreme Court recently ordered companies to pay up a disputed amount retrospectively for over a decade. According to the Department of Telecom estimates, Airtel owes ₹35,586 crore to the government. What are the analysts saying? “We retain our constructive view on Bharti Airtel (Bharti) considering its ability to capitalise on the higher data demand tailwind leveraging its strong balance sheet and network capacity,” said Edelweiss Research in its report dated April 20 where it pegged the target price for Airtel at ₹606. <table><tbody><tr><td>Brokerage</td><td>Target price for Airtel</td></tr><tr><td>Edelweiss </td><td>606</td></tr><tr><td>Angel Broking</td><td>594</td></tr></tbody></table> India is <a href="https://www.businessinsider.in/tech/news/heres-why-facebooks-mark-zuckerberg-is-paying-top-dollar-for-a-stake-in-mukesh-ambanis-reliance-jio/articleshow/75286331.cms">expected to add</a> more than 150 million active internet subscribers in the next 12 months, according to IAMAI. Given the weakening of Vodafone-Idea, both as a firm and a brand, the India telecom market is narrowing down to a duopoly between Reliance Jio and Airtel. The difference in market value of the two telcos is just too huge given the growth potential and the lack of competition. See also: <a href="https://www.businessinsider.in/business/telecom/news/india-is-changing-its-mobile-habits-and-that-can-help-airtel-and-vodafone/articleshow/75152973.cms">India is changing its mobile habits and that can help Airtel and Vodafone</a> <a href="https://www.businessinsider.in/business/telecom/news/airtel-signs-7636-crore-deal-with-nokia-to-enhance-4g-network-lay-foundation-for-5g-network/articleshow/75423000.cms">Airtel signs ₹7,636 crore deal with Nokia to enhance 4G network, lay foundation for 5G network</a> <a href="https://www.businessinsider.in/business/corporates/news/reliance-jio-stake-sale-to-silver-lake-boosts-ril-share-valuation/articleshow/75526873.cms">Reliance Jio’s valuation jumps more than half a billion dollars in just 12 days, thanks to Silver Lake</a>

Airtel shares set for a catch up rally after Reliance Jio takes a huge valuation lead

<ul><li>Telecom service provider Jio is currently a subsidiary of <keyword id="6355199" type="COMPANY" weightage="20" keywordseo="reliance-industries">Reliance Industries</keyword> which is India’s second largest private company by market capitalisation. </li></ul><ul><li>Jio which triggered a data price war in Indian telecom sector to grab market share has been piling up debt since its birth in 2016. </li></ul><ul><li>Reliance Jio may sell shares in the latter half of 2020, according to a report, and the proceeds may go into repaying debt. </li></ul><ul><li>The company is conducting meetings with bankers and other consultants. </li></ul>Billionaire <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword> is considering taking his telecom venture Reliance Jio public in the latter half of 2020, according to <a href="https://economictimes.indiatimes.com/markets/stocks/news/reliance-inds-plans-to-take-jio-public-in-2020/articleshow/69883688.cms">an ET report</a>. Reliance Industries’, the energy-to-retail-to-telecom group however is keen on bringing in investors for the first two investment trusts (InvITs), which own its tower and fibre assets. The company and its executives are busy conducting meetings with bankers and other consultants which indicate that the talks on a possible Initial Public Offer (IPO) are gathering pace, the report said citing sources. The company is the only telecom player to post profits in the quarter ending March, which went up 65% from a year earlier, the ET report said. Gaining market share Jio has already become a force to reckon with in the telecom sector as it has been rapidly gaining market share across the country. Without including national long distance, the revenue market share is at 39.8%, according<a href="https://www.businessinsider.in/the-magic-number-that-vodafone-idea-airtel-and-jio-are-chasing-is-50-market-share/articleshow/69752746.cms"> to a report</a> by brokerage Emkay. Jio found a niche in B and C circles, like Madhya Pradesh, West Bengal and Bihar amongst others. However, all of this has been achieved with deep discounts funded by a massive debt. “The intensity of RMS (revenue market share) gains has decelerated due to slower revenue growth,” an Emkay Global report said. As on March 31, 2019 Reliance Industries’ borrowings under current liabilities stood at 644 billion crore which doubled from a year back at ₹374 billion, according to their financial statements. However, within a short period of operations, Jio managed to again over 306 million subscribers, by the way of burning cash with steep discounts on its 4G data. Preparing for 5G The company also has to prepare for the next phase in the telecom industry-- the roll out of 5G. Jio might need capital to take part in the upcoming 5G spectrum auction that can help leapfrog the country into the next generation of mobile technology. Raising money from the capital market through issue of shares will not only give the company more ammunition but also more room to borrow money.

Mukesh Ambani’s Reliance Jio may go public next year as debt for discounts starts to bite and 5G era beckons

<ul><li>Jio’s predatory data tariffs are still 25 to 30% lower than that of Airtel and Vodafone Idea. </li><li>Airtel and Vodafone’s joint market share is expected to drop 25% to 27% each. </li><li>The total debt of the top three telecom players — Reliance Jio, Bharti Airtel and Vodafone Idea — is as high as ₹3.9 lakh crore. </li></ul> The telecom war that <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>’s Reliance Jio started will rage on for another two years, according to a report by India Ratings. The stress of investments and the lack of revenues due to deep discounting is hurting the entire industry, including Jio. The total debt of the top three telecom players — Reliance Jio, Bharti Airtel and Vodafone Idea — is a massive ₹3.9 lakh crore, according to the report. That’s almost <a href="https://www.businessinsider.in/sensex-today-jumps-150-points-after-rbi-move-to-transfer-surplus/articleshow/70852202.cms">twice the amount the </a>Reserve Bank of India gave the Indian government, which is ₹1.76 lakh crore this week. The debt run up by the three war ravaged players is also almost half of the country’s total fiscal deficit which is<a href="https://www.livemint.com/news/india/fiscal-deficit-crosses-61-of-budgeted-target-in-first-three-months-of-fy20-1564574137744.html"> pegged at around</a> ₹7 lakh crore for 2019-20. Fiscal deficit is the amount of money the government is falling short of, to carry on its planned expenditure. RJio’s market share will go up 40% to 45% It doesn’t look like the debt is going away anytime soon. Jio’s predatory data tariffs are still 25 to 30% lower than that of Airtel and Vodafone Idea. India Ratings expects RJio’s market share to increase 40% to 45% over the next two years. At the end of the last financial year, it stood at around 30%. “Airtel and Vodafone’s joint market share is expected to drop 25% to 27% each,” the report predicted. Jio’s already declared that it’s targeting 50% market share in total telecom revenues, without mentioning a timeline. At his annual general meeting, Ambani promised Reliance Industries’ shareholders of Jio’s growth. The company already has around 340 million customers but is aiming for more. “The potential for growth is immense, and half a billion customers is now well within our reach,” Ambani said. No free cash flow available till 2021-22 As a result of high debt and continuous losses, the telecom players will remain structurally weak for the next two years, says the report. This means they will have no or low free cash in hand. “These companies will continue to rely on refinancing or capital infusion. However, near-term liquidity is supported by large cash levels available post capital infusions (Vodafone Idea, Airtel) and continued financial flexibility due to strong parentage (Jio),” the report said. From here on, there are a few things that can change the fortunes of the flailing telecom sector starting with Jio’s pricing strategy. Any change and possible increase in tariffs and subsequent response by other two players, will pave the way for recovery in the telecom sector. SEE ALSO <a href="https://www.businessinsider.in/the-difference-between-mukesh-ambanis-jio-and-ani-ambanis-reliance-communications/articleshow/70869465.cms">Mukesh Ambani's strategy with Reliance Jio is avoiding Anil Ambani's mistakes with RCom</a>

Top three telecom companies’ debt is at ₹3.9 lakh crore — that’s half of India’s fiscal deficit

<ul><li><keyword id="6354576" type="UNKNOWN" weightage="20" keywordseo="facebook">Facebook</keyword> has invested $5.7 billion for a 9.9% stake in <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>’s <keyword id="6354504" type="DEFINITION" weightage="20" keywordseo="reliance-jio">Reliance Jio</keyword> which puts the pre-deal valuation at ₹4.4 lakh crore. </li><li>The reason <keyword id="6354630" type="PERSON" weightage="20" keywordseo="mark-zuckerberg">Mark Zuckerberg</keyword>’s investment makes sense is because <keyword id="2003276" type="PERSON" weightage="20" keywordseo="Jio">Jio</keyword> is likely to be the fastest-growing segment for Reliance in the post-COVID world. </li><li>It’s also a way for Facebook to gain an edge in the Indian market which has largely been a duopoly between Facebook and Google when it comes to digital solutions for over a decade — a duopoly that has come under pressure with ByteDance’s entry.</li></ul>Facebook announced that it has invested $5.7 billion for a 9.9% stake in Mukesh Ambani’s Reliance Jio platform — India’s largest telecom player by the <a href="https://www.businessinsider.in/mukesh-ambanis-reliance-jio-collaborates-with-mark-zuckerbergs-facebook-to-launch-digital-literacy-program-in-india/articleshow/70066803.cms">number of subscribers</a> ⁠— and in early trade, Reliance Industries (RIL) <a href="https://www.businessinsider.in/india/news/mukesh-ambanis-reliance-industries-stock-gets-a-50000-crore-facebook-boost/articleshow/75285485.cms">share price jumped up as much as 7.5%</a>. This is because Facebook’s Mark Zuckerberg has paid a certain premium for a stake in Reliance Jio. The investment has valued Jio at over half of RIL’s total market capitalisation as on April 21. Jio makes up for less than a tenth of RIL’s consolidated revenue which includes other segments like retail, petrochemicals, and oil and gas exploration to name a few. <div type="image" title="RIL" msid="75286310" hostid="261" caption="&amp;lt;p&amp;gt;Reliance Industries&amp;#39; share price today morning, April 22&amp;lt;/p&amp;gt;"></div> What is the real worth of Reliance Jio? On April 14, HDFC Securities valued Jio at ₹4.8 lakh crore. For every share of RIL which was worth around ₹1,400 then, JIo was estimated to be ₹811 — 57.9% of the market cap. Deven Choksey, the managing director of KR Choksey Shares &amp; Securities told Business Insider, on April 21, that he valued Jio at ₹550 rupees a share when RIL was trading at around ₹1200. Based on a market cap ₹7.8 lakh crore, Jio would be worth ₹3.4 lakh crore by Deven's estimate. At a <a href="https://www.businessinsider.in/business/news/facebook-picks-up-10-stake-in-jio-platform-for-rs-43574-cr/articleshow/75283937.cms">pre-deal value of ₹4.4 lakh crore</a>, Zuckerberg’s buy-in is about 33% higher than what Choksey had estimated on Tuesday. This explains why RIL’s shares have spiked in a market that’s bearing down due to the impact of Coronavirus. Why Facebook needs Jio The reason Zuckerberg’s investment makes sense is because Jio is likely to be the fastest-growing segment for Reliance in the post-COVID world. Even though the Reliance subsidiary is only three-and-a-half years old, it has stolen the top spot from others like Vodafone and Bharti Airtel to become the largest telecom player in the country making it an attractive buy-in for the US company. “The recent tariff hike should still allow Jio’s EBITDA (earnings before interest, tax, depreciation and amortization) to rise 78% YoY [year-on-year] in FY21. Strong telecom and a weaker rupee will offset big cuts in petrochemicals, refining and retail as FY21 EPS rises a small 1.6% YoY,” estimates capital market and investment group, CLSA. It’s also a way for Facebook to gain an edge in the Indian market which has largely been a duopoly between Facebook and Google when it comes to digital solutions for over a decade. The duopoly that has recently been threatened by ByteDance making inroads with its mobile apps like TikTok and Resso. Entering India hand-in-hand with Jio will give Facebook access to its 370 million subscribers. There are over 451 million active internet users in the country today with the number estimated to rise beyond 600 million in the coming year, according to Internet and Mobile Association of India (<a href="https://cms.iamai.in/Content/ResearchPapers/d3654bcc-002f-4fc7-ab39-e1fbeb00005d.pdf">IAMAI</a>). What does Asia’s second-richest man get from the deal? For Ambani, CLSA forecasts that big deals like the one between Ambani and Zuckerberg will help reduce the burden of debt on RIL, which was at about $22 billion ⁠— 2.7 times its EBITDA⁠— at the end of March 2019. CLSA expects that the ratio will fall to 1.7 times in FY22 even before the Jio-Facebook deal was announced. RIL’s plan to reduce its debt also included a stake sale in its energy business to Saudi Arabia’s Aramco. But the crash in crude oil prices has cast a shadow on the stake sale to Aramco. A fresh start for Facebook This could be a new chapter for Facebook who has been trying to crack the Indian market for a while, but precious ventures like FreeBasics and internet.org did not have the <a href="https://www.businessinsider.in/tech/news/mukesh-ambani-and-mark-zuckerberg-are-looking-to-create-a-wechat-like-super-app-says-report/articleshow/75174322.cms">expected outcome</a>. It also puts Facebook head-to-head against the likes of Japan’s SoftBank, which normally holds the title of being India’s largest tech investor with over $10 billion invested across the country in unicorns like Flipkart, Ola and OYO. See also: <a href="https://www.businessinsider.in/business/news/facebook-picks-up-10-stake-in-jio-platform-for-rs-43574-cr/articleshow/75283937.cms">Mark Zuckerberg's Facebook picks up 9.9% stake in Mukesh Ambani's Jio for $5.7 billion</a> <a href="https://www.businessinsider.in/india/news/mukesh-ambanis-reliance-industries-stock-gets-a-50000-crore-facebook-boost/articleshow/75285485.cms">Facebook’s investment in Reliance Jio boosts RIL share value by ₹50,000 crore</a>

Here's why Facebook's Mark Zuckerberg is paying top dollar for a stake in Mukesh Ambani's Reliance Jio

<keyword id="6354504" type="UNKNOWN" weightage="100" keywordseo="Reliance-Jio">Reliance Jio</keyword>, the latest entrant in <keyword id="169072" type="UNKNOWN" weightage="20" keywordseo="Indian-telecom-market">Indian telecom market</keyword> owned by <a href="http://www.businessinsider.in/mukesh-ambani-knows-what-the-millennials-want-heres-how/articleshow/57390611.cms">Mukesh Ambani</a>, expects to gain over 50% revenue market share with operating margins of over 50%, thanks to huge expected data demand and growth. 
 As per sources, it would only take <keyword id="2003276" type="UNKNOWN" weightage="20" keywordseo="Jio">Jio</keyword> 3 to 4 years to do this, however nothing has been officiated by Jio. 
 
Also read: <a href="http://www.businessinsider.in/airtel-vodafone-and-idea-are-facing-the-heat-from-jio-as-they-may-lose-upper-end-customers/articleshow/57287150.cms">Airtel, Vodafone and Idea are facing the heat from Jio as they may lose upper-end customers</a> 
 
As of December 31st, market leader <a href="http://www.businessinsider.in/reliance-jio-is-forcing-telecom-players-to-tweak-their-plans-airtel-may-drop-roaming-charges/articleshow/57371097.cms">Bharti Airtel</a> had a share of 33.1%, with rivals <a href="http://www.businessinsider.in/vodafone-india-steps-up-its-game-gives-4g-expansion-contract-worth-rs-3650-crore-to-nokia/articleshow/56804433.cms">Vodafone India</a> and Idea Cellular owning 23.5% and 18.7% share, respectively. They were followed by TTSL, Aircel and RCom with 6.2%, 5.5% and 4% market shares, says brokerage HSBC, after analysing TRAI data. 
 
Also read: <a href="http://www.businessinsider.in/jios-back-breaking-new-data-plans-are-giving-rivals-sleepless-nights/articleshow/57432021.cms">Jio’s back-breaking new data plans are giving rivals sleepless nights</a> 
 
Ever since Jio was launched, the Indian telecom industry is going through a price battle, in which data is going to play a huge role. The analyst presentation by Jio said that the company’s overall data revenue market will touch Rs 3 lakh crore in the next three-four years, because of users moving from voice to data. The move would be worth Rs one lakh crore, taking data to Rs 1.3 lakh crore in the same period. 
 
This revenue growth in the industry would up government revenues by 50%, which is ironical since it was only last month Jio’s promotional offers cost the government Rs 685 crores. 
 
Leading global consultants have predicted that users in India would demand data at 500-600 crore GB per month, which when calculated at the rate of Rs 50 per GB, translates to Rs 3.0 - 3.6 lakh crore per year. This is almost 1.35 to 1.6% of the projected GDP of the country. While this may seem a lot, it still lags behind the usual 2.5% in developed economies. 
 
As per the presentation, around 400 million Indian subscribers can now afford to spend Rs 500 and above on digital services. In 2009, this average revenue per user (ARPU) was Rs 179. 
 
The presentation also added that while the firm is capable to launch 5G services as well, it is for the time being offering only 4G services. 
 
(Image source: VoiceNData)

Roaring data demand leads Reliance Jio to expect over 50% of revenue market

<ul><li>The board of directors at Vodafone Idea have approved a ₹250 billion fund raising plan.</li><li>This is expected to be the largest ever rights issue in the Indian corporate sector. </li><li>The funds will enable Vodafone Idea to take on market incumbents Jio and Airtel more effectively in terms of capital expenditure and low prices. </li></ul> The board of directors at Vodafone Idea have approved a $3.5 billion (₹250 billion) fund raising plan that will give the recently-merged telecom services behemoth enough ammunition to take on the mighty Reliance Jio, owned by the richest man in Asia, <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>. This is expected to be the largest ever rights issue in the Indian corporate sector. In addition to enabling Vodafone Idea to take on market incumbents Jio and Airtel more effectively in terms of capital expenditure, the proceeds of the issuance will also be used to cull Vodafone's debt burden. Nearly two-thirds of the funds to be raised, or about $2.5 billion, will be secured from the promoter group Vodafone and <keyword id="44373" type="COMPANY" weightage="20" keywordseo="Aditya-Birla-Group">Aditya Birla Group</keyword>. Vodafone India's parent will provide $1.5 billion while the Aditya Birla Group will provide the remainder. Furthermore, if any portion of the rights issue is unsubscribed, the promoters will take up the slack. Investors reacted favourably to the commitment of the company's largest shareholders as the shares of the merged entity were up 3.5% when the National Stock Exchange opened this morning. Vodafone owns a 45.2% in the combined entity while the Aditya Birla Group owns 26%. After the completion of their merger last year, Vodafone-Idea, which began operations on 1st September, became India's largest telecom services provider by market share (32%) and subscribers (422 million). However, the entity's growth in revenue and subscribers significantly trails that of Jio and Airtel. In fact, it even lost 6.5 million subscribers between September and October 2018, according to a report by the Telecom Regulatory Authority of India. The funds will help it sustain low prices and match the deals offered by its competitors. Analysts are unsure, however, whether ₹250 billion will be enough for Vodafone Idea to take on Jio, which spent ₹140 billion on capex alone in the quarter ended December 2018. The merged entity might be compelled to undertake another rights issue or a bond sale later in the year. Reliance Jio’s entry into the telecom market in September 2016 had triggered an intense tariff war, driving down the cost of data in the world’s second largest market with over a billion mobile phone subscribers. While customers rejoiced, Jio's competitors were forced to contend with a loss of profitability and market share. Nearly two years into the battle for dominance, Jio with its deep pockets has kept the ante up while many others have bled to irrelevance. SEE ALSO: <a href="https://www.businessinsider.in/idea-and-vodafone-are-a-step-closer-to-becoming-indias-largest-telecom-operator/articleshow/64461224.cms">Idea and Vodafone are a step closer to becoming India’s largest telecom operator</a> <a href="https://www.businessinsider.in/two-years-on-reliance-jio-continues-to-dominate-indian-telecom-market-beating-global-giants/articleshow/67380627.cms">Two years on, Reliance Jio continues to dominate Indian telecom market, beating global giants</a>

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