Jio cements rural dominance in July; JioBharat likely adding to growth, analysts say

Reliance Jio cemented its dominance of rural India in July as it was the only telco to add mobile users while both Bharti Airtel and Vodafone Idea (Vi) lost ground.

Analysts said the scenario underlines the growing appetite of entry-level mobile users for Jio’s internet-enabled budget feature phone, JioBharat, to shift to 4G technology.

“Jio's strong (rural) momentum is likely driven by JioBharat phone subscribers, especially post Bharti's recent hikes in the minimum recharge plans and Jio's launch of the new phone,” UBS said in a note.


Latest subscriber data collated by the Telecom Regulatory Authority of India (Trai) showed Jio added 2 million mobile users in the rural markets in July while both Airtel and Vi lost 540,000 and 690,000 rural users respectively.

Jio’s rural mobile user base expanded to 194.73 million in July, while Airtel and Vi’s slipped to 180.84 million and 111.32 million respectively.

In July, Jio’s parent, Reliance Industries (RIL) had launched Jio Bharat, an internet-enabled feature phone, costing Rs 999 in a bid to attract more of the estimated 250 million entry-level mobile broadband customers, especially in the rural markets where competition is set to intensify with rival Airtel also eyeing this market.

Both Jio and Airtel have been seeking to grab loss-making Vi’s user base in the hinterlands as bulk of the telecom sector’s net 4G user additions are from rural markets. Latest mobile user data collated by the sector regulator Trai, though, suggests Jio has an initial edge over Airtel in that quest, especially with the latter partly weighed down by recent increases in base prepaid rates.

Analysts, though, expect both Jio and Airtel to corner 8% and 5% additional market share gains respectively in the premium mobile broadband users’ segment in the coming months, on the back of their rapid pan-India 5G rollouts and loss-making Vi’s continuing cash constraints.

Trai data showed that between February and July, Jio and Airtel added 16 million and 12.9 million premium mobile broadband users respectively, while Vi lost 800,000 such users. This underscores the mounting pressure of speedy 5G rollouts by India’s top two telcos on debt-laden Vi.

“We expect accelerated market share gains for Bharti (5%) and Jio (8%) at Vi’s expense, especially among premium subscribers, driven by (their) pan-India 5G rollouts, Vi’s cash constraints, long-delayed fundraise and uncertainty on its 5G launch,” Kotak Institutional Equities said in a recent note.

As per latest Trai data, Jio, Airtel and Vi’s wireless user market shares stood at 38.6%, 32.7% and 19.9% respectively in July 2023. Wireless user marketshares of Jio and Airtel rose by 2.37 and 1.08 percentage points in the year through July 2023, while Vi’s fell 2.3 percentage points.

Jefferies, in turn, said mobile number portability (MNP) requests surged to a six-month high of 11.77 million in July, underscoring stiff competition in the sector and focus on market share gains. “We expect MNP requests to stay elevated partly due to Vi users porting out to experience 5G on Bharti/Jio…this is likely to keep churn elevated and drive up S&M costs for telcos.”

Sector experts analysing the latest subscriber data said net mobile user additions for Jio were broad-based across rural and urban circles in July, whereas Airtel’s net additions were largely in the metros and A circles while growth in the B/C circles saw a flattish trend.