close
Business
close
Stock Market

Airtel VS Jio: Detailed Analysis & Review

Created on 19 Jan 2023

Wraps up in 7 Min

Read by 580 people

Updated on 23 Jan 2023

Bharti Airtel and Reliance Jio are two of the largest telecommunications companies in India. Both have had a significant impact on the industry in recent years. In this article, we'll take a closer look at the two companies and compare their performance in terms of key metrics such as subscribers, revenue, and profitability.

Here are the customer base (in crores) of major Indian telecom companies.

Reliance Jio, since its launch in 2016, has been the clear leader in terms of subscriber growth in the Indian telecom market. The company has over 41 crore subscribers (a decrease since the previous year), still making it the largest telecom operator in India. Bharti Airtel has around 49.1 crore subscribers (beating Reliance Jio this year in terms of subscriber growth). In terms of revenue and profit, Bharti Airtel generated a consolidated revenue of ₹1.16 lakh crore and EBITDA of ₹5.8 lakh crore in the fiscal year 2021-22. Reliance Jio, on the other hand, generated revenue of more than ₹1 lakh crore and EBITDA ₹40 thousand crore in the same fiscal year. In terms of revenue, Bharti Airtel has been the more successful company in recent years in terms of operating margins.

Customer acquisition and market share of jio and airtel from 2018 to 2022.

Profitability is another area where the two companies differ. Bharti Airtel has been consistently profitable in recent years, with net profit of ₹4,254 crore in the fiscal year 2022. Reliance Jio, on the other hand, has yet to turn a profit, which I couldn’t find since they don’t have it on the Reliance Industries’ Annual report for any of the years since 2017 (I wonder why).

While Reliance Jio has been the clear leader in subscriber growth, Bharti Airtel has been more successful in revenue and profitability. However, It's important to remember that Reliance Jio is a relatively new player in the market and is still in the process of building its network infrastructure, which may explain its lack of profitability.

Respect where it is due, both Bharti Airtel and Reliance Jio have played a major role in shaping the Indian telecommunications market, and their ongoing competition is likely to continue to drive innovation and benefit consumers in the years to come.

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

When it comes to the 5G network, both companies have made efforts to roll out the next-generation technology in India. Bharti Airtel had announced that it plans to launch 5G services in India in the second half of 2021, and has already conducted 5G field trials in multiple cities. Reliance Jio, on the other hand, had also announced plans to launch 5G services in India and has already built a significant amount of 5G-ready infrastructure. Reliance Jio had also announced that its 5G network would be available for commercial use by the end of 2021.

It's safer to say that it's too early to say which company will be the winner in the race of 5G, as the Indian market is still in its early stages of 5G deployment and the winner will be determined by the company that can offer better coverage, reliability, and affordability. 

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.

Another major challenge for Jio is the lack of infrastructure for 5G services in India. While Jio has already begun testing its 5G network, the fact remains that the infrastructure needed for 5G services, such as cell towers and fiber optic cables, is still not widely available in the country. This means that even if Jio were to launch its 5G services, it would likely only be able to do so in a limited number of cities and towns.

Furthermore, the cost of 5G devices is still relatively high, which means that many consumers may not be able to afford to upgrade to the new technology. This is especially true in a country like India, where the majority of the population is still living below the poverty line.

Another challenge for Jio is the lack of awareness and knowledge of the 5G network among the general public. While 4G was a relatively new technology in India in 2016, 5G is still in early stages of development and deployment in most of the world. As a result, many people may not understand the benefits of 5G and may not see the need to upgrade to the new network.

Despite these challenges, it is important to note that Jio has always been an innovative and forward-thinking company. The company has already begun to invest heavily in the necessary infrastructure for 5G services, and it has also announced plans to develop a low-cost 5G smartphone. Additionally, Jio has also announced partnerships with major technology companies such as Google and Facebook, which could help the company to overcome some of the challenges that it currently faces. Talking of partnerships, Airtel too is in the game since Google knows how to bet odds fairly well.

In conclusion, while Jio may not be able to replicate its 4G launch success from 2016 with the launch of its 5G network, the company is still well-positioned to make a significant impact in the Indian telecommunications market. With its strong financial position, innovative approach to business, and partnerships with major technology companies, Jio is likely to play a major role in driving the development and deployment of 5G services in India in the coming years.
 
For the most part, both companies are well-positioned to take advantage of the opportunities presented by 5G, and it will be interesting to see how they compete in this area in the coming years.

It's difficult to say which company is the "better" telecom player between Bharti Airtel and Reliance Jio, as both have their own strengths and weaknesses. Bharti Airtel has been more successful in terms of revenue and profitability, while Reliance Jio has been the leader in terms of subscriber growth.

Airtel is a pure-play telecommunications company, which means that its primary business is in the telecommunications industry. This is in contrast to companies like Reliance Jio, which is a subsidiary of Reliance Industries, a conglomerate with interests in a variety of industries.

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.

The Bottom Line

In summary, Airtel is a pure-play telecommunications company that offers transparency and focused investment opportunities, while Jio is a subsidiary of a larger conglomerate which may be more suitable for investors looking for a diversified portfolio (given you’re fine with the rest of the business). Both companies have their own strengths and weaknesses, and if you’re too confused or can’t make up your mind, do what Google did, Split the odds. It ultimately boils down to the individual investor's preference and risk appetite (ahh, such a sucker for this last line).

comment on this article
share this article
Photo of Rishabh Kaushik

An Article By -

Rishabh Kaushik

2 Posts

1.8k Views

3 Post Likes

Rishabh is a finance enthusiast who is in a love-hate relationship with writing. Armed with a wicked sense of humour, he delivers jokes that land 50% of the time... Every other instance crashes and burns as he does after his lunch. To add more about this guy, he is into absurd comedy, can play the guitar (or so he says), and is a social pendulum.

Share your thoughts

We showed you ours, now you show us yours (opinions 😉)

no comments on this article yet

Why not start a conversation?

Looks like nobody has said anything yet. Would you take this as an opportunity to start a discussion or a chat fight may be.

Under Stock Market

"A few" articles ain't enough! Explore more under this category.

close
Share this post
share on facebook

Facebook

share on twitter

Twitter

share on whatsapp

Whatsapp

share on linkedin

Linkedin

Or copy the link to this post -

https://insider.finology.in/stock-market/airtel-vs-jio

copy url to this post
Copied