According to Livemint, Reliance Jio may soon emerge as the leading wireless telecom company in India. Reliance Jio’s net revenue may have crossed Bharti Airtel Ltd’s wireless revenue in India last quarter, according to analysts at Kotak Institutional Equities Research. If the Reliance Industries Ltd (RIL) unit maintains the momentum, then it may emerge as the largest telecom company as early as the end of 2018.

“We expect Bharti Airtel’s net India wireless revenues (reported gross wireless revenues less estimated gross interconnect revenues) to be around ₹87-88 billion for 2QFY19. Reliance Jio’s reported revenues of ₹92.4 billion are net of interconnect revenues as the company adjusts interconnect revenues in the interconnect costs line,” analysts at Kotak Institutional Equities Research said in a note.

“If Bharti does not report a material beat on our estimated wireless revenues for the quarter, Reliance Jio has perhaps crossed Bharti on net India wireless revenues to become #2 after Vodafone Idea. If the current trends continue, Reliance Jio will likely become #1 on net revenues as early as 3QFY19E,” the note said.

Reliance Jio’s focus remains on expanding its subscriber base but the ban on Aadhaar-based e-KYC can affect this. This, however, is seen as a temporary phenomenon. The trends indicate continued tough times for incumbent telecom companies which have to step-up capital expenditure (capex) while dealing with price erosion.

“We expect competitive intensity to remain elevated over the next 9-12 months as fight for subscriber share continues. Reliance Jio, over the weekend, introduced 100% cashback for all packages and various players have been tweaking with pricing and packs,” Jefferies India Pvt. Ltd said in a 19 October note. Further, the incumbents, given their weakened financial position, are lagging in capex, which is crucial for product offerings and customer retention.

“Reliance Jio continues to be on an accelerated capex drive, spending around ₹330 billion in H1FY19 (Q2 spend ₹160 billion) which is ~70% its own FY18 capex and is largely equivalent to the combined capex spend of the remaining two incumbents (Bharti Airtel, Vodafone Idea) put together in FY18,” SBICAP Securities Ltd said in a note. “The scale of investments and the current profitability differential suggest that Reliance Jio is unlikely to relent till it achieves a meaningful market leadership in terms of revenue market share.”

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In the second quarter of this fiscal year, Reliance Jio had a significant capex of around Rs 160 billion, although it was 6 per cent down from the previous quarter. Analysts expect the high capex to continue for another two quarters or so, post which the company would shift its focus to the broadband business.

The telecom operator is on track to achieve the 99 per cent of population coverage target within FY2019. Jio attributed the higher capex in the first half of FY19 to expanding mobility networks, which is in the last phase and will subside in the next one-two quarters.

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India consumers are rapidly upgrading to 4G feature phones, led by the JioPhone, that offer a much richer data and video experience, forcing plain handset makers to review their production plans.

CyberMedia Research (CMR) data shows that market share of 2G phones has plunged 17 percentage points in just six months to 30% in the quarter ended June, while Reliance Retail’s 4G variant, called JioPhone, increased its market share by 9 percentage points in the same period to 27%