JioPhone may add Rs 6,000 cr to industry revenues: Fitch

JioPhone launch, scheduled two months from now, by Reliance Industries’s subsidiary Jio is set to rewrite the rules of the 4G industry in India.

The affordable handset is likely to help the new telecom player gain revenue market share as it allows Jio to attract first-time 4G users in a big way.

In fact, according to Fitch Ratings, the cheap handset would add 3% to 4% (around $950 million, or Rs 6,000 crore) to annual industry revenue if adopted by at least 100 million subscribers, which the rating firm feels is very likely.

Industry-adjusted gross revenue is now likely to rise in 2018, after it declined by 15.6% year-on-year to $6.1 billion in the quarter ending March 2017.

“Growth will be driven by increased data consumption and a rise in average spending per user. The monthly tariff on Jio’s 4G phone of $2.3 (Rs 153) is more than 50% above the current average revenue per rural user, most of which are on 2G phones and consume minimal data,” said Fitch Ratings in the note.

Jio is likely to boost its revenue market share from 3% to 4% to more than 10% in 2018. “We expect most of the increase to come from new revenue generated by the expansion of the 4G market. The higher monthly tariffs that Jio is charging on this handset are likely to limit the impact on the revenue market share of incumbents such as Bharti Airtel,” the Fitch Ratings said.