Reliance Jio will be unfazed by Vodafone-Idea merger. Here’s why
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It seems Vodafone and Idea merger will not be able to take on Reliance Jio’s juggernaut. Reliance Jio 's push for a 50% revenue market share by FY 2021 may become a possibility but it won’t be easy.
Apart fromVodafone and Idea's smaller on-ground 4G presence, the merger will also lower their capex spends over the next 12-to-15 months. This may take down its revenue market share (RMS).
As per reports, their combined RMS could decline to less than 20% from nearly 44% now.
"Mergers are difficult to execute and if Vodafone and Idea were to cut capex-spending, pre-merger, they may be more vulnerable (on the RMS front) to competition,” HSBC's telecoms analyst Rajiv Sharma said in a note to clients.
Sharma told ET, Jio, by virtue of its "50% RMS estimate seems to be assuming that Vodafone India andIdea Cellular , which are discussing a merger, may see combined RMS fall from nearly 44% currently to less than 20% over the next four years,.
However, Goldman Sachs has a different view. It called Jio's 50% RMS target "aggressive”.
It expects Jio to retain two-thirds of its estimated 120 million subscribers, once it starts charging from April, but feels the company's "revenue per user may remain low initially as it transitions to becoming the first network of choice.”
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Apart from
As per reports, their combined RMS could decline to less than 20% from nearly 44% now.
"Mergers are difficult to execute and if Vodafone and Idea were to cut capex-spending, pre-merger, they may be more vulnerable (on the RMS front) to competition,” HSBC's telecoms analyst Rajiv Sharma said in a note to clients.
Sharma told ET, Jio, by virtue of its "50% RMS estimate seems to be assuming that Vodafone India and
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It expects Jio to retain two-thirds of its estimated 120 million subscribers, once it starts charging from April, but feels the company's "revenue per user may remain low initially as it transitions to becoming the first network of choice.”
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