Airtel closes in on Jio in wireless revenue share

Bharti Airtel, India's No.2 telecom operator, has narrowed the gap in its wireless revenue market share (RMS) with leader Reliance Jio, amid an ongoing fierce battle for supremacy in the sector, said analysts.

"Over the last two quarters, Airtel has narrowed the wireless RMS gap versus Jio by almost 300 basis points (bps), driven by strong residual flow-through of the July 2024 tariff hikes and 90% incremental margin in the India wireless business (versus 49% for Jio)," Motilal Oswal said in a research note seen by ET. RMS is a key performance metric that measures overall telecom market leadership.

As per its calculations, the RMS gap between Jio and Airtel has shrunk to around 170 basis points (1.7 percentage point) in the October-December quarter of fiscal 2025 from around 440 bps in Q1FY25. Airtel's RMS has increased to 41.2% in Q3FY25 from 39.6% in Q1FY25, while Jio's has shrunk to 42.9% from 44%, it said.

Goldman Sachs said Airtel's revenue in the fiscal third quarter grew 21% on-year compared with Jio's 16%. This further strengthened the Sunil Mittal-led telecom operator's RMS by 50 bps in the October-December period (and 190 bps over the last four quarters) to 41.3%. Jio's RMS fell from 43.3% in a year to 42.6% in the quarter ended December 2024, the brokerage firm said.

Motilal Oswal said Airtel was "the biggest beneficiary" of the July 2024 tariff hikes, having reported a ₹35 increase in wireless ARPU (average revenue per user) over the last two quarters of FY25. For Jio, the gain was ₹20.

Airtel reported ARPU of ₹245 for the third quarter, compared with ₹203.30 by Jio.

To be sure, analysts said Airtel has been reporting stronger RMS gains versus Jio as the latter's tariff hike benefits come with a slight lag compared with others due to a higher mix of longer-validity recharge subscribers. They, in fact, expect Jio to see the full beneficial impact of the July 2024 rate hikes through Q4FY25 and Q1FY26.

Analysts expect both telcos to continue scoring RMS gains at loss-making Vodafone Idea's expense till the latter concludes its pending network investments. Motilal Oswal estimates Vi's RMS to dip marginally to 15.9% in Q3FY25.

Jio and Airtel did not respond to ET's queries till press time Tuesday.

Airtel recently reported an almost six-fold surge in quarterly net profit, on the back of robust mobile broadband user gains (6.5 million) in the December quarter, further boosted by one-time gains on the consolidation of Indus Towers and the July tariff increases.

Jio reported 24% on-year growth in net profit for the December quarter and 3.3 million user gains during the three-month period.

"Airtel has delivered another strong quarter, focusing on value creation from consistent AGR (adjusted gross revenue) market share (RMS) wins, continuing to narrow the gap versus Jio," ICICI Securities said in a research note.

According to analysts, Airtel's stronger mobile broadband user gains is because it has been aggressively targeting top-end customers and is also the sector leader in post-paid, which underlines its 20% premium in ARPU compared with Jio in Q3FY25.