Airtel Vs Jio : A Detailed Analysis

"Welcome to our latest edition of the THE TRUTH OF INDIA newsletter!

Today, we are going to deliver the detailed analysis of Airtel and Jio. So, sit back and enjoy the read !

The two biggest telecom firms in India are Bharti Airtel and Reliance Jio. Both have recently had a big effect on the industry. In this post, we'll examine the two businesses in more detail and contrast how they performed in terms of important criteria like subscribers, revenue, and profitability.

Since its debut in 2016, Reliance Jio has dominated the Indian telecom market in terms of customer growth. Despite a decline from the previous year, the business still ranks as India's largest telecom operator with over 41 crore members. Almost 49.1 billion people are Bharti Airtel subscribers (beating Reliance Jio this year in terms of subscriber growth). During the fiscal year 2021–2022, Bharti Airtel produced consolidated revenue of 1.16 lakh crore and EBITDA of 5.8 lakh crore.

Reliance Jio, on the other hand, produced EBITDA of 40.000 crore and revenue of over 1 lakh crore in the same fiscal year. Bharti Airtel has recently had better operating margins than any other company in terms of sales.

Another area where the two businesses diverge is profitability. In the most recent years, Bharti Airtel has continuously turned a profit, with a net profit of $4,254 crore in the fiscal year 2022. While Reliance Jio has yet to make a profit, which I was unable to locate because they don't list it in any of the Reliance Industries' Annual Reports since 2017, (I wonder why).

Jio vs Airtel: Product Offerings and Prices

Bharti Airtel and Reliance Jio offer a wide range of telecommunications services, including mobile services, broadband, and direct-to-home (DTH) television.

In terms of mobile services, both companies offer prepaid and postpaid plans with varying data and call allowances. Bharti Airtel has a range of plans with prices starting as low as ₹19 for a day and offers unlimited calls and 1.5 GB of data per day. Reliance Jio also offers a range of plans with prices starting as low as ₹12 for a day and offers unlimited calls and 1.5 GB of data per day.

Both companies also offer broadband services, with Bharti Airtel offering both fiber and DSL broadband plans with speeds up to 100 Mbps. Reliance Jio offers fiber broadband plans with speeds up to 1 Gbps.

In the DTH segment, Bharti Airtel offers Airtel Digital TV, which has a range of packages with prices starting as low as ₹99 per month and offers over 500 channels. Reliance Jio offers JioTV, which has a range of packages with prices starting as low as ₹99 per month and offers over 600 channels.

It's worth noting that both companies have been continuously expanding their offerings and trying to diversify their revenue streams, with Reliance Jio entering into new business ventures like online grocery and e-commerce and Bharti Airtel expanding into digital media through the launch of its streaming platform, Airtel Xstream.

Jio 5G vs Airtel 5G

These businesses have worked to introduce India to the 5G network and its cutting-edge technologies. Bharti Airtel has already carried out 5G field experiments in numerous places and has previously stated that it intends to introduce 5G services in India in the second half of 2021. Reliance Jio, on the other hand, has already constructed a sizable amount of 5G-ready infrastructure and has also announced plans to introduce 5G services in India. By the end of 2021, Reliance Jio's 5G network would be open for business, according to the company.

Will Jio 5G be Successful?

Jio, the Indian telecommunications giant, made waves in the industry when it launched its 4G network back in 2016, offering affordable data plans and nearly free voice calls. However, it is unlikely that the company will be able to replicate this success with the launch of its 5G network.

One major reason for this is the intense competition in the Indian telecommunications market. When Jio launched its 4G network, it was the only player in the market offering such services at such low prices. However, now, other major players such as Airtel and Vodafone have also started offering 4G services, and have even begun to lower their prices in order to compete with Jio.

Additionally, the Indian government has also introduced a number of policies and regulations that have made it harder for companies to disrupt the market. For example, the recent Supreme Court ruling that upheld the government's definition of "adjusted gross revenue" (AGR) has resulted in a significant increase in the amount of money that telecommunications companies need to pay to the government in terms of license fees and spectrum charges. This makes it harder for companies to offer low-cost plans and still turn a profit.

Jio vs Airtel: Ownership and Business

Resulting in one of the key differences between Airtel and Jio, their ownership structure. Airtel is a standalone company that is listed on the stock exchange, and its shares can be purchased directly by investors. On the other hand, Jio is a subsidiary of Reliance Industries, which means that in order to gain exposure to Jio's performance, one would have to purchase shares in Reliance Industries.

This difference in ownership structure can have implications for investors. For example, investors who are specifically interested in the telecommunications industry may prefer to invest in a pure-play company like Airtel rather than a conglomerate like Reliance Industries. Additionally, Airtel being a standalone company offers transparency to its shareholders as they are aware of the company's financials and performance.

Another key difference between Airtel and Jio is their market position. Airtel is an established player in the telecommunications industry, with a long history of operations and a significant customer base. On the other hand, Jio is a relatively new player that has rapidly gained market share through aggressive pricing and innovative offers. Airtel, however, has been working on expanding its network and increasing its customer base, and is also investing in new technologies and services like 5G, IoT and OTT services to keep up with its competitors.

Thanks for reading !

This newsletter was written by BIKRAM GORAI. If you liked this advice from this newsletter, subscribe to it.

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