Mukesh Ambani led Reliance Jio Infocomm might face a loss of ₹15,000 Crore at the end of the current fiscal brokerage Sanford C Bernstein said. The firm also stated that the loss wouldn’t be seen immediately as Reliance sells its heavily subsidized Cell phones through its retail arm, Reliance retail. Another reason behind this is that Jio uses non-standard depreciation metrics.
The impending loss of ₹15,000 will be much higher the the loss of its other rivals like Bharti Airtel and Vodafone-Idea limited.
However, Bernstein also added that Jio will become telecom market leader with the highest number of subscribers and highest service revenue, assuming that Jio will keep on rendering heavy subsidies on for its network and Jio Phone.
The US research and Brokerage firm expected that Jio will start focusing in monetizing once it reaches its set target of achieving 50% market share. While some industry experts say Jio will focus on monetizing when it reaches a market share of 30%. As per December quarter report, Jio has a control of 29.7% revenue market share. This is just marginally short its rivals Airtel and Vodafone-Idea which have 31.4% and 30% revenue market share respectively.
Jio which entered in 2016, has a subscriber base of about 280 million which is continuously expanding at a very rapid rate. Bharti Airtel has 284.2 million subscriber, but Jio is expected to surpass that number at the end of current quarter. While the Vodafone-Idea merger has 384.2 million subscribers at present.
The new telecom company since its entry in 2016 has been aiming of number one spot in the Indian telecom industry and is also paying heavy price for it.