When Reliance Jio increased its data tariff by 25% in December last year, it had hoped for a boost to its revenue and profit numbers.
Instead, the move seems to have helped its rivals more, with Bharti Airtel overtaking Jio in terms of data consumption growth for the first time.
For the first time since Jio entered the market, Airtel was able to report a bigger growth in data traffic on its network compared to what Jio was able to report.
During the three months ended March, Airtel saw an increase of 900 million GB in the total data carried on its wireless network. For the same period, Jio was able to increase the data carried on its network by only 750 million GB.
In other words, the total amount of data consumed on Airtel’s network increased by a whopping 16.3% during the Jan-Mar period, while Jio saw a modest 6.3% increase.
This also had significant implications for revenue and profits.
While Reliance Jio was forced to be content with a 1.7% increase in the average amount paid by its subscribers, Bharti Airtel saw a whopping 14.3% jump in customer spends.
In other words, Jio subscribers spent Rs 2.20 more per month on average, while Airtel users increased their spending by a whopping Rs 19 per month in January-March.
The numbers seem to indicate that the across-the-board increase in data tariffs seen in December pushed many multi-SIM users to shift some of their data consumption to their Airtel SIM.
PER CAPITA CONSUMPTION
The tariff increase had significant implications on per-capita data consumption trends, even though Jio had claimed that its data price hikes would not impact data consumption.
For the latest quarter, the Mukesh Ambani-led company saw a modest increase of just around 200 MB in the monthly data consumed by an average user, while Airtel saw a jump of 1 GB.
As a result, the average revenue consumed by a Jio 4G customer increased to 11.3 GB/month (from 11.1 GB), while it increased to nearly 15 GB/month from around 14 GB/month on Airtel’s network.
It should, however, be kept in mind that overall, the total consumption of data on Jio’s network is still twice as much as that on Airtel’s network. This is because Jio has more than twice as many data subscribers as Airtel.
The total number of 4G data subscribers on Airtel’s network increased by 12.5 million during the quarter, while Jio saw its 4G subscriber numbers increase by 17.5 million. Jio does not break out its 4G subscribers into data and voice customers.
Airtel’s numbers for the latest quarter also suggested that the company was investing heavily into its network to keep up with rising consumption levels.
During the three months from January to March, Bharti Airtel added 30,024 wireless broadband base stations, taking its total to 5.04 lakh.
The company typically adds only around 13,000-16,000 new broadband stations per quarter.
Still, it is still behind Jio in terms of overall cell sites. Jio is estimated to have close to 8.5 lakh wireless broadband base stations, while Vodafone Idea is estimated to have 4.35 lakh wireless broadband stations.
The sharp increase in the number of new base stations on Airtel’s network came at a cost. The company spent Rs 9,521 cr on purchasing equipment and other expenses during the three months ended March, compared to its usual run-rate of around Rs 3,000-4,000 cr.
Airtel also started expanding its wired broadband service more aggressively, adding eight new cities to its network during this quarter to take the total to 111. It had added 10 new cities in the previous three quarters.
Reliance Jio is, meanwhile, busy with rolling out its wired broadband service, and has set a medium term target of signing on 2 cr households under the service. It currently has around 10 lakh subscribers.
Meanwhile, Airtel had 24.14 lakh wired broadband customers as of March, up from 23.52 lakh three months earlier.