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Jio 4G Coverage In C-category Telecom Circles Is The Prime Reason Behind Surge In AGR: Report

Jio will be glad that a large share of its AGR was derived from C circles that include Odisha, Jammu and Kashmir, Bihar, Himachal Pradesh, Assam and the North Eastern parts of India.

Reliance Jio’s unprecedented growth doesn’t seem like slowing down anytime soon, as the company has posted excellent adjusted gross revenue (AGR) figures. And this has been on the back of its 4G services that have reached even the C category telecom circles.

Reliance Jio’s service penetration:

Jio has made a big impression in small towns and C level category telecom circles, something that even their peers, including state-owned telecom operator – BSNL have been able to do. The company’s growth in these small telecom circles has been on account of its penetration with the JioPhone. This is probably the most important device that has helped the company target small telecom circles. The JioPhone is an ultralow-cost feature phone that runs on a 4G network. This is something that all of Reliance Jio’s rivals have lacked and aren’t able to replicate.

Telecom industry data:

The telecom industry stats released for the period April to June, by the Telecom Regulatory Authority of India (TRAI), should certainly be a cause for joy for the telecom operator as it shows that the Adjusted Gross Revenue (AGR) figure for Jio is the highest in the industry and stood at a whopping Rs. 7,125.69 crores.

In comparison, the next highest figures belonged to India’s largest private telecom player, Bharti Airtel at Rs.6,723.54. Bharti Airtel, however, beats Reliance Jio when the figures for national long distance revenue are added to this. When this figure is added the numbers for Bharti Airtel stood at Rs. 10,192.12 crores as against Reliance Jio’s number of just Rs. 7,200 crores.

Jio will be extremely happy with the fact that a large share of its AGR was derived from C circles that include Odisha, Jammu & Kashmir, Bihar, Himachal Pradesh, Assam and the North Eastern parts of India. The company’s AGR in these regions grew by a healthy 17.2 percent during this period.

On the other hand, the market average growth in these regions was pegged at only 12.8 percent. The company’s growth in the metro and tier one cities was limited and in fact, saw a dip of 0.9 percent and mostly lost out its share to its rivals like Bharti Airtel. The company’s growth in the C category cities is on account of the fact that other telecom majors are yet to launch services in these regions in a full-fledged manner when it comes to 4G connectivity.

View from analysts:

A report from ICICI securities added “It has freeway in C-circles due to lower 4G network penetration by Bharti. Whether Jio can sustain performance in B&C circles where incumbents are fast expanding network is key to watch.” Similarly, Kotak commented that “Jio just delivered 14 percent QOQ growth in revenues without needing the industry revenue pie to expand must worry the incumbents”

The industry nevertheless to say is facing severe pressure that has been brought in by the entrance of Reliance Jio as it offers low-cost services to its users.

The overall AGR for the market had risen by 1.3 percent in this quarter compared to the last, but it has dropped a significant margin by 9.4 percent compared to the same time last year as the figure stood at Rs. 32,000 crores. While Jio’s AGR grew by 14 percent on a quarter on quarter basis, Bharti Airtel’s AGR only grew by 0.9 percent, lesser than the market average. – My Smart Price

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