Reliance Jio and Bharti Airtel together will have about 81% market share by adjusted revenue by FY25, making the competition for Vodafone Idea tougher in the coming quarters, said market analysts, pointing to the need for the No 3 carrier to launch 5G services at the earliest.

Reliance Jio and Bharti Airtel together will have about 81% market share by adjusted revenue by FY25, making the competition for Vodafone Idea tougher in the coming quarters, said market analysts, pointing to the need for the No 3 carrier to launch 5G services at the earliest.

“Vodafone Idea’s delayed 5G rollout could trigger further share consolidation with leading operators RJio and Bharti which are ramping up 5G services. The top two operators continue to dominate with combined 77% of sector revenue, which we expect will rise to 81% by FY25CL. We remain positive on RJio and Bharti," analysts at CLSA said in a note.

“Vodafone Idea’s delayed 5G rollout could trigger further share consolidation with leading operators RJio and Bharti which are ramping up 5G services. The top two operators continue to dominate with combined 77% of sector revenue, which we expect will rise to 81% by FY25CL. We remain positive on RJio and Bharti," analysts at CLSA said in a note.

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The indirect focus is also on much- needed equity infusion into the Aditya Birla Group-promoted carrier from its promoters as well as external investors, as the delay in a planned fund-raise of ₹20,000 crore is impacting capex and 5G rollouts as well as shrinking subscriber share.

The carrier will have to undertake a change in strategy in order to protect market share, they said.

The telco has lost market share by about 24 percentage points by revenue since 2017 and in FY 23 on-year, it has lost 1.2 percentage points which has brought down the share to 17% as of March 2023.

The share is calculated as a percentage of sector revenue for the quarter or the full year.

As per the latest Trai data for FY23, India mobile sector revenue was up 14%YoY to ₹2,215bn/US$27bn led by 2021-end tariff hikes. Sector revenue was up 73% from lows of FY19.

Vodafone Idea’s loss has been a gain for Reliance Jio and Bharti Airtel. Jio, at No 1, leads with revenue share of 41%, up 1.2ppt YoY, while Bharti’s share was 36%, up 80 basis points, in FY23. Bharti Airtel’s gains came mainly from rural markets while Jio’s gains were from urban markets. Analysts at Jeffries said that over FY23-25, they expect sector revenues to grow at 12% CAGR led by tariff hikes with 370bps market share shifts gains for Bharti and Jio. Delays in tariff hikes could accelerate market share shifts away from Vodafone Idea, they added.

The agency noted that while Vodafone Idea broadly maintained its market share in Metros in FY23, it has seen a 150-170bps market share erosion in A and B-Circles, primarily Maharashtra, Gujarat and Kerala, which together account for one-third of VIL’s revenue. Notably, while Bharti’s growth was driven by ARPU growth, Jio’s growth was driven by subscriber growth.