Though we might not know precisely how telecom market structures will change when a powerful new competitor enters any market, it always is reasonable to assume that a competent new supplier, with financial and brand name strength, will take share from existing providers.
Reliance Jio Infocomm widely is considered to be such a well-heeled and well-known competitor, so the issue is how much market share it might take, from whom, and what the ancillary effects will be on such important matters as average revenue per account, or the average level of retail prices.
Analysts at Macquarie Research expect Reliance Jio will gain at least 15 percent market share over four years.
Macquarie predicts Idea Cellular will lose as much as seven percent of its market share. If that happens, it is likely Reliance Jio will vault into the top ranks of mobile service providers in India, trailing only Bharti Airtel and Vodafone India, while knocking Idea Cellular out of the number-three spot.
Macquarie analysts also expect data pricing cuts from the current Rs 0.23 per MB to around Rs 0.1 per MB by end of this fiscal, putting severe pressure on the data average revenue per user (ARPU) of the incumbent telcos.
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