New Delhi– Reliance Jio Infocomm Ltd grabbed the leadership position in terms of revenue market share in the third quarter of the current fiscal, racing past Vodafone Idea and Bharti Airtel.

It is set to top the sector in the next few quarters, said a report from the brokerage house JM Financials.

Based on Q3 results, the reported mobile revenues of Vodafone Idea, Reliance Jio and Airtel were Rs 11,000 crore, Rs 10,400 crore and Rs 10,100 crore, respectively, implying a revenue market share of 31.6 per cent, 29.9 per cent and 29 per cent, respectively, the report said.

Since Jio does not report interconnect revenues (on incoming calls) in its top line, the report states that on a like-for-like basis, the Mukesh Ambani-owned company’s mobile revenues were around Rs 11,200 crore (including interconnect revenues), the highest in the market in the September-December quarter, with an underlying revenue market share (RMS) of 31.6 per cent, ahead of Vodafone Idea’s 30.8 per cent, said the report.

“However, unlike other telcos, Jio does not report interconnect revenues in its top line, instead netting them off in interconnect costs. Thus, on a like-for-like basis, Jio’s Q3 RMS was 31.6 per cent, ahead of even Vodafone Idea,” the report stated.

JM Financials said the reported mobile revenues overstate the (pre-tax) consumer spending, as they include interconnect (inter-operator) flows.

Jio has achieved the RMS leadership in the mobile market in the sixth quarter since the launch of commercial 4G services, it said.

On reported mobile revenue basis, Jio went past Bharti Airtel in the third quarter to become number two in India with revenues of Rs 10,380 crore (reported RMS of 29.9 per cent).

Circle wise, Jio has over 30 per cent RMS in 16 circles and is the market leader in four of them — Madhya Pradesh, Rajastan, Assam and Orissa. Based on the Q3 gross revenue data, Jio’s all-India RMS was 30 per cent, marginally below Airtel’s 31.3 per cent and Vodafone Idea’s 32.3 per cent.

Jio’s RMS gains have come mainly at the expense of Vodafone Idea and and smaller telcos, the report noted.

As for the incumbents, Vodafone Idea has seen maximum RMS erosion in A and B circles. It has been able to largely hold on to RMS leadership in the Metro category. But in the C category, Vodafone Idea is now a distant number three after Airtel and Jio, the report said.

Vodafone Idea’s RMS continues to be over 50 per cent in Kerala, but is likely to drop over the next few quarters. Its top two circles by gross revenues were Maharashtra (46 per cent RMS) and Gujarat (45 per cent RMS).

As per Telecom Regulatory Authority of India’s (TRAI) third quarter report, the total wireless gross revenues was up 3.6 per cent quarter on quarter while adjusted gross revenue was up 2.3 per cent.

“We estimate that aggregate wireless revenue was up 1.1 per cent QoQ, driven by 12 per cent growth reported by Jio. Airtel’s mobile revenues were flat, while Vodafone Idea’s declined by 0.3 per cent. Wireless revenue continues to be below 0.75 per cent of nominal GDP in India, well below the level for peers like China (1.1 per cent) and Indonesia (1.3 per cent),” the report stated.

According to JM Financials, the underlying wireless spending before taxes (AGR less non-wireless revenues) was up 1.3 per cent, estimated at Rs 31,100 crore in the Q3 against Rs 30,700 crore in the preceding quarter.

“Assuming that there would be no fresh tariff cuts, mobile spending should continue to rise in our view, driven by subscribers upgrading from feature phones to smartphones, adoption of unlimited voice plans, minimum average revenue per user plans for feature phone users and the Jio phone exchange offer,” the report said. (IANS)