CAPSTONE PROJECT REPORT ON

“Financial performance of Tele-Communication Companies:

A study of Jio and Airtel”
SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD
OF THE DEGREE OF
BACHELOR OF COMMERCE (HONS.)

CHANDIGARH UNIVERSITY

Submitted to: Submitted by:

Name: Dr. Sukhmani ANUPAM SAGAR (21BCM1001)

Designation: Assistant Professor MRINAL MITTAL (21BCM1076)

Chandigarh University, JASLEEN KAUR (21BCM1308)

Gharuan, Mohali AISH GARG (21BCM1899)

 STUDENT DECLARATION

Certified that this project report “FINANCIAL PERFORMANCE OF TELE-

COMMUNICATION COMPANIES: A STUDY OF JIO AND AIRTEL” is the Bonafide
Work of “ANUPAM SAGAR (21BCM1001), MRINAL MITTAL (21BCM1076),
JASLEEN KAUR (21BCM1308), AISH GARG (21BCM1899) who carried out the project
work under my/our supervision.

DR NITIN PATHAK Dr. SUKHMANI

(HEAD OF THE DEPARTMENT) (ASSISTANT PROFESSOR)

SUPERVISOR
 CERTIFICATE FROM THE INSTITUTE GUIDE

This is to certify that the Final Project titled “FINANCIAL PERFORMANCE OF

TELE-COMMUNICATION COMPANIES: A STUDY OF JIO AND AIRTEL” is an
academic work done by “ANUPAM SAGAR (21BCM1001), MRINAL MITTAL
(21BCM1076), JASLEEN KAUR (21BCM1308), AISH GARG (21BCM1899)”
submitted in the partial fulfilment of the requirement for the award of the degree of
Bachelor of Commerce (Hons.) at University School of Business, Chandigarh University,
Punjab under my guidance & direction.

To the best of my knowledge and belief, the data & information presented by him/her in
the project has not been submitted earlier.

Signature:

Name of the Faculty: Dr. Sukhmani

Designation: Assistant Professor

 TABLE OF CONTENT
Chapter Page No.
CHAPTER-1 INTRODUCTION
1.1 Telecommunication Sector
1.2 Market Segmentation
1.2.1 Indian Telecom Market
1.2.2 Global Communication Market
1.2.3 Telecommunications customer segmentation
1.3 Telecom Providers
1.3.1 Airtel
1.3.2 Jio
1.4 Significance of the Study
1.5 Objective of the Study
1.6 Scope of the Study
CHAPTER-2 LITERATURE REVIEW
CHAPTER-3 RESEARCH METHODOLOGY
3.1 Research Design
3.2 Type of the Study
3.3 Type of the Data
3.4 Data Collection
3.5 Tools used
3.6 Software Used
3.7 Statistical Tool Used
3.8 Evaluation Criteria
3.8.1 Evaluation Criteria for Ratio Analysis
3.8.2 Evaluation Criteria for Comparative Analysis
3.8.3 Evaluation Criteria for Common Size Analysis
3.8.4 Evaluation Criteria for Trend Analysis
CHAPTER-4 DATA ANALYSIS
4.1 Ratio Analysis
4.1.1 Jio
4.1.2 Airtel
4.2 Comparative Statement Analysis
4.2.1 Jio
4.2.2 Airtel
4.3 Common Size Statement Analysis
4.3.1 Jio
4.3.2 Airtel
4.4 Trend Analysis
CHAPTER-5 FINDINGS OF THE STUDY
CHAPTER-6 LIMITATIONS OF THE STUDY
CHAPTER-7 SUGGESTIONS
CHAPTER-8 CONCLUSION
REFERENCES
 CHAPTER: 1

INTRODUCTION

India currently has the world's second-largest telecom market. The nation has 1,183.49
million subscribers as of January 2021, and as of the third quarter of the fiscal year 2021, the
telecom industry's gross revenue was US$ 9.35 billion. Small businesses that were
mercilessly destroyed by the telecom giant have faced numerous challenges over the past five
years. This report aims to examine the financial performance of India's leading telecom
companies following the introduction of Reliance JIO.

The telephone, internet, and television broadcast industries in India are the three main
segments of the country's telecommunications sector. The latter is currently transforming a
next-generation network, utilizing a vast array of contemporary network components,
including media gateways, digital telephone exchanges, network switching subsystems, and
signalling gateways at its core. These are connected via a range of transmission systems,
including optical Fiber and microwave the subscriber-to-core access network is made up of
several copper-pair, optical Fiber, and wireless technologies, offering a high degree of
diversity. In the television industry, satellite television, a relatively new transmission
technology, has become very popular. In India, radio broadcasting has increased since the
advent of private FM. One of the biggest domestic satellite systems in the world, the Indian
National Satellite System, has played a major role in supporting telecommunication in the
nation. India has a wide-ranging communications network that uses satellite, radio, television,
Internet, and phone to connect every region of the nation.

Modern technology modernization is widely viewed as a predetermined need for every nation
in this era of prosperity and advancement. Telecommunications has entered a new phase of
development driven by improved technology and more competition from well-established
companies. Technical developments in the telecoms sector are associated with the ongoing
growth of the mobile business. The major objective of the service providers is to create a
devoted clientele by tracking their progress and keeping hold of current clients so they may
benefit from their allegiance. The paper's goal is to address these issues.
1.1 TELECOMMUNICATION SECTOR
All telephone and internet service providers are under the umbrella of the
telecommunications industries in the information and communication technology sector. This
industry is vital to the development of mobile communications and the information society.

Although traditional phone conversations are still the industry's largest source of income,
network technology advancements have made telecom more about text (such as email and
messaging) and visuals (such as streaming videos) than it is about voice calls these days. For
computer-based data applications like broadband information services and interactive
entertainment, high-speed internet connectivity is ubiquitous. Broadband telecom technology
mostly uses digital subscriber line (DSL) technology. Mobile network-delivered value-added
services have the quickest growth.

For almost every industry, the telecom sector remains the hub of innovation, growth, and
disruption. Modern civilization is becoming increasingly dependent on mobile devices and
the broadband connectivity they provide. These devices are also playing a major role in the
growth of several important trends, including mobile payments, video streaming, and the
Internet of Things (IoT).

Companies in the telecommunications industry enable global communication via cables,

phones, the Internet, and airways. These businesses build the infrastructure needed to transmit
data—whether it be speech, text, audio, or video—anywhere in the globe.
The biggest players in the market include internet service providers, cable companies,
satellite companies, and wired and wireless phone operators.
A few years ago, the largest national and regional operators made up the telecommunications
industry. The industry has experienced fast deregulation and innovation since 1995, partly
due to the Telecommunications Act of 1996 that followed. Government monopolies have
faced a multitude of new competitors after being privatized in various nations across the
world.

1.2 MARKET SEGMENTATION

1.2.1 India Telecom Market: With more than 1.16 billion subscribers, the Indian telecom
market is among the biggest in the world. Tele density was 84.88% as of April 2022, and
there were 788.77 million broadband subscriptions worldwide.
Important Sections:

 Phone Services: This category covers both wireless and wired phone calls.
Services for Data and Communications: Contains internet-based data and
communications.
 TV services and streaming platforms are referred to as OTT (Over-the-Top)
and Pay TV services.

In India, the entire amount of wireless data used has been rising continuously, with 3G and
4G data making up a large portion of this total.
Growth in IoT, cloud, data centre, and 5G sectors is driving the telecom sector's expansion.
By the end of 2022, India wants to have 5G available in 20–25 towns and cities.

1.2.2 Global Telecommunication Market: The telecom equipment is included in the

hardware segment of the global telecom market.

 Software: Consists of platforms for software.

 Services: Includes a range of telecom offerings.
 Division based on Enterprise Size: Big Businesses, Small and medium-sized
businesses, or SMEs

The market includes a wide range of sectors, such as E-commerce retail, telecom & and IT,
media & and entertainment, healthcare, logistics & and transportation, and others.
Geographically, it encompasses South America, MEA, Asia-Pacific, Europe, and North
America.

1.2.3 Telecommunications Customer Segmentation:

Customer value segmentation divides consumers into groups according to how valuable they
are to the company.
Understanding behaviour patterns is the main goal of customer behaviour segmentation.

 Customer lifespan Segmentation: Considers the stages of a customer's

lifespan, such as acquisition, retention, and churn.
  Segmentation of Customer Migration: Examines movement within and
between segments.
 Precise targeting made possible by advanced segmentation promotes retention
and growth. Every client forms a micro-segment, which improves company
planning.

To summarise, segmentation is essential for optimizing business strategies, guaranteeing

sustainable growth, and customising telecom services to individual client needs.

1.3 TELECOM PROVIDERS

Two of India's biggest telecom providers are Bharti Airtel and Reliance Jio. The industry has
recently experienced a notable impact from both.

1.3.1 Airtel:

In 1995, Sunil Bharti Mittal founded Airtel, formerly known as Bharti Airtel Limited, a
worldwide telecommunications company based in India, with its headquarters located in New
Delhi. To name a few products and services, Airtel offers digital TV, mobile, fixed-line, and
broadband internet.
1. Wide Network Coverage: Airtel has a vast network covering most of India and provides
4G and 5G services.
2. Customer-centric Approach: Airtel offers a variety of services that are specifically
designed with its customers' requirements in mind. It places a high priority on supporting its
clients.
3. Diversified Business: Airtel currently offers enterprise services, DTH, and broadband as
part of its offerings.
4. Robust Brand Equity: Airtel is a trusted and well-known brand in the Indian telecom
industry.

1.3.2 Jio:
Jio, commonly known as Reliance, Jio Infocom Limited is an Indian telecom company
founded in 2010 by Reliance Industries Limited's chief executive, Mukesh Ambani. Jio began
offering 4G LTE mobile, broadband, and digital services in September 2016, marking the
beginning of its commercial operations.
Background and history:
An overview of Jio's past is shown below:
a) Reliance Industries Limited purchased a 95% stake in Infotel Broadband Services
Limited in 2010 after the latter won the government of India's auction for the right to
utilize 4G spectrum nationwide.
b) Mukesh Ambani declared in 2013 that he would invest INR 1.5 lakh crore (about $20
billion) in the telecom sector, with an emphasis on 4G services.
c) For Reliance employees, Jio conducted a test run of its services in December 2015.
d) To draw customers, Jio provided free phone and internet access for six months before
its formal debut in September 2016.
 e) In December 2016, Jio claimed to have recruited 50 million users in just 83 days,
shattering the previous record for the fastest telecom operator subscriber ramp-up.
f) In March 2017, Jio asserted that it had broken yet another record by reaching 100
million customers in under 170 days.
g) In July 2017, Jio launched the Jio Phone, a 4G VoLTE feature phone, targeting the
rural and low-income sectors.

Advantages:

a) Jio's innovative pricing strategy, which included offering free voice and data services
at first and then introducing reasonably priced data plans, has helped it rapidly amass
a substantial user base.
b) Broad Network Coverage: Jio has a wide network footprint across India and provides
its users with 4G and 5G services.
c) High Investment in Infrastructure and Technology: Jio has made large investments in
infrastructure and technology, including building a pan-Indian fiber optic network,
which has allowed it to improve the quality of its network and offer high-speed data
services.
d) In September 2018, Jio unveiled Jio Fibre, a broadband service that offers customers
TV, phone, and high-speed internet.

1.4 SIGNIFICANCE AND PURPOSE OF THE STUDY

Companies' financial performance significant for several reasons and has varied uses:
 a) Indicator of Health: A company's general health can be inferred from financial
performance measurements such as profit, cash flow, and revenue. They show if a
business is making enough money to pay its bills, invest, and give stakeholders their
money back.
b) Investor Decision Making: Financial performance is a key factor in the decisions
that investors make when purchasing, holding, or disposing of stocks or bonds. While
bad performance could result in divestiture, positive financial performance indicates
possibilities for development and rewards.
c) Creditworthiness: To evaluate a company's creditworthiness, creditors and lenders
look at its financial performance. While poor performance may result in greater
borrowing rates or make it more difficult to secure financing, strong performance can
lead to easier access to funding at advantageous conditions.
d) Shareholder Value: For many businesses, maximizing shareholder value is the main
goal. Shareholder value is directly impacted by financial performance due to things
like dividends, stock price growth, and total returns on investment.
e) Competitive Positioning: Businesses can better understand their competitive
positioning by comparing their financial performance to that of their counterparts in
the industry. Strategic measures to strengthen market position might be enabled by
identifying areas where performance falls behind competitors.
All things considered, the significance and ultimate objective of financial performance is
demonstrated in its function as a gauge of a business's health, its capacity to draw in capital
and credit, its ability to make strategic decisions, and its accountability to stakeholders and
authorities.

1.5 OBJECTIVE OF THE STUDY

a) To explore the solvency, profitability and turnover ratios of the company to know the
financial position of Jio and Airtel.
 b) To make a comparative financial analysis in terms of market share and growth trend
of Jio and Airtel.

1.6 SCOPE OF THE STUDY

This study will help us to gain knowledge about the Indian telecom sector and where it is
heading, give insights about various topics such as follows:
  Place of the Indian telecom sector in the world
 What is happening in the current Indian telecom industry?
 It’s contribution to the development of the country.
 Recent changes in the Indian telecom sector
 Position and contribution of Bharti Airtel and Jio in the Indian telecom sector with the
help of its financials.

The study provides us the opportunity to analyse the Indian telecom sector keeping focus on
one of its biggest operators i.e., Bharti airtel and Jio, and their future prospectus in the
development of the sector.

CHAPTER-2

LITERATURE REVIEW
Geetha, M. (2019) This comparative study scrutinizes the financial health of India’s telecom
giants, juxtaposing public sector BSNL’s recurring losses with the private sector’s
profitability. It underscores the seismic shift caused by Reliance Jio’s market entry in 2016-
17, which led to widespread losses, sparing only Bharati Airtel, albeit with a reduced profit
margin. The analysis reveals BSNL’s inability to generate profit due to high operational
costs, while private firms like Airtel, Idea, and Reliance Communications generally fared
better financially, suggesting a more efficient management and operational strategy in the
private sector.

Kumar etal (2018) This chapter dissects the competitive dynamics between Reliance Jio and
Bharti Airtel, focusing on Jio’s disruptive market entry and its immediate impact. Utilizing
secondary sources, the study compares the companies’ shortcomings and strengths, noting
Jio’s superior service quality, as evidenced by TRAI data, and Airtel’s diminished 4G
dominance post-Jio’s launch.

Pishori, K. (2019) This study explores customer relationships and revenue efficiency in
selected telecom companies, highlighting the impact of loyalty programs and policy strategies
on long-term growth. It assesses cost accounting practices, network pooling benefits, and
service quality competitiveness. Additionally, it examines the societal contributions through
tax policies and the transition from GAAP to IND AS standards, emphasizing improved
transparency and accountability in financial reporting. The research underscores the telecom
sector’s role in societal development and the challenges faced in adapting to regulatory
changes and technological advancements. Overall, the study provides insights into the
operational and financial dynamics of the telecom industry, reflecting on its significance in
the broader economic context.

Mishra, A. and Siddiqui, I. (2023) A study examines how satisfied customers are with
Bharti Airtel's telecom offerings. It seeks to pinpoint factors that influence happiness and
how they relate to loyalty. Surveys and interviews are part of the mixed-methods approach.
Data is gathered through surveys about a variety of topics, including network efficiency and
service quality. The key findings of the study are Customer satisfaction was positively
correlated with aspects of service quality, The SERVQUAL model, which is used to examine
service quality, was enhanced by the study, and Research was done on the relationship
between customer pleasure and loyalty. Customer happiness has been proven to be impacted
by network performance.

Goyal, A. and Malhotra, G. (2018) Research looks at how Reliance Jio affects the telecom
companies' financial results with its free internet, phone calls, and 4G services. All companies
saw a fall in net profit and net profit margin. The study examines the financial results of
significant telecom industry participants. Profits before and after Jio's introduction are
compared in the study. Revenue and the base of subscribers are taken into account in the
study. Annual report data is gathered, and then MS Excel is used for analysis.

Saxena, S. and Jindal, M. (2022) The study examines an Indian telecommunications

network's service quality. The purpose of the study is to evaluate customer satisfaction and its
relationship to service quality. Data for the analysis were to be gathered using a
questionnaire. 17-question survey with 6 items on demographics, Likert's scale with a
satisfaction rating range of 1 to 5, SPSS, Excel, and Smart PLS are used to analyse data. Tests
of hypotheses using the ANOVA single-factor test. The purpose of the study is to evaluate an
Indian telecommunication network's level of service. A survey instrument was created
specifically for the investigation. Respondents in the survey range in age from 21 to 40 and
older. The number of samples for each variable is listed in a table included in the paper. A test
was performed on the samples' mean.

Azam, A. and Begum, A. (2023) The study focuses on Indian telecom corporations'
falsification of their financial statements. Manipulation detection is done using the Beneish
M-Score Model. Investigation of the manipulation of earnings by quantitative analysis. The
telecom sector has highlighted the complexity of financial statement fraud. Vigilance is
required for sustainable growth and investor trust, it is stressed. Methodology of quantitative
research, Research on the Beneish M-score model, Analysis of financial characteristics and
ratios, and Examination of typical intervals for sample variables are used. The study looks at
Indian telecom companies' manipulation of their financial statements. Manipulation is
detected using the Beneish M-Score model. The report emphasizes how difficult it is to
commit financial statement fraud in the telecom industry. Investor confidence and sustainable
growth require vigilance.
Sam, S. and Kanade, S (2021) Jio's aggressive strategy and alluring packages caused a
disruption in the telecom industry. After Jio entered the market, the value of other providers
declined. With more inexpensive plans and improved services, Jio drew millions of users.
Jio's arrival has led to an unanticipated increase in competition in the telecom industry. It was
investigated how Jio affected financial and consumer behaviour.

Satsangi, S. and Saini, P. (2019) In the recent past, M&A has been increasing daily
throughout the globe to improve the competitive market and lower risk, allowing businesses
to get a larger market share. A merger occurs when two businesses combine and merge their
identities to form a new company. This is accomplished by transferring the businesses’
undertakings, business, and any other assets and obligations to the new company. The term
“acquisition” refers to the purchase of a sizable percentage of securities or assets by one
company from another; this can be a friendly or hostile acquisition. Examining Bharti Airtel’s
overall mergers and acquisitions as well as the financial performance of the company before
and after its merger and acquisition of Telenor are the primary goals of the study. The
analytical study conducted by the researcher focuses on the financial performance of Bharti
Airtel and Telenor India before and after they were acquired. The relevant Information was
gathered from secondary sources, such as several company-related websites. The study’s time
frame is one fiscal year, including pre- and post-mergers and acquisitions. The base year,
which is zero, is the year that mergers and acquisitions were conducted. The study employed
t-tests, ratio analyses, and graphs as presentation methods. According to the study’s findings,
Bharti Airtel’s ratio is higher than Telenor India’s, and the parent firm, Bharti Airtel, is
benefiting more from the M&A with Telenor and all the subsidies.

Acharya, s. (2018) Conventional marketing instruments such as product calibre, cost, and
advertising edge are no longer necessary for corporate achievement. In the incredibly
competitive market, every business is keeping up with these factors. Building a devoted and
long-lasting consumer base is the task facing company strategists. The first person that comes
to mind while focusing on the customer for business success is the organization’s employee.
A worker could use individualized care to win over a devoted client. Employee engagement
can be used as a technique to involve staff in improving customer happiness. Improving
corporate goals through employee involvement is crucial. Four different kinds of
relationships arise from this kind of practice: transactional customers, happy customers,
devoted customers, and fans. The current study on workers in the Airtel telecom business is
being carried out in Bhubaneswar. According to research, there are direct correlations
between highly engaged workers and an organization’s overall performance, including
financial outcomes, employee turnover, job discontent, and absences. To improve customer
happiness, the current study aims to determine whether any such link exists in the context of
engaged personnel providing superior service.

Das. S. and De, K. (2023) The second-biggest telecommunications market globally is found
in India. Because of the growing number of subscribers and the expanding need for network
connectivity, the industry is extremely competitive. The goal of this study is to examine the
tactics and regulations that influence whether India’s mobile telecom companies will survive.
The advantages and disadvantages of many elements that ultimately determine these
companies’ success or failure are also highlighted. The study’s exploratory research
methodology involved reviewing thirty doctoral theses and consulting secondary sources,
such as websites and insightful reports. The literature analysis reveals that the Indian telecom
business deliberated on industrial development, technological advancement, and
infrastructure assistance through effective policymaking. An organization’s performance is
contingent upon several factors, including customer loyalty, customer retention, marketing
mix, service quality, and the telecom operators’ corporate image, in addition to an efficient
telecom policy structure. In addition to motivating consumers to make purchases in order to
gain a competitive edge in the telecom market, all of these elements had a favourable impact
on customer perception and happiness.

Billimoria, R. and Sankpal , G. (2020) The food industry is one of the global sectors with
the quickest rate of growth. Today’s restaurant sector is made up of a diverse range of
ownership structures and management styles that provide a range of services. The
fundamental product, which is still food and drink, doesn’t change, though. The Indian
restaurant business has a bright future because of the rise of weekend culture in metro areas,
the rise in the standard of life of individuals in the service class, and the emergence of mall
and retail culture. Consumers typically consider several variables while selecting a restaurant.
These variables can be interpreted as follows: brand name, variety of food offered, flavour,
cleanliness, location, charge, payment method, loyalty, free gifts, etc. The retail industry,
Future Group, Mr. Kishore Biyani, and his retail adventure are the main subjects of the study.
It examines every step of the process, including the founding of Future Group, present
problems, and the prospects for India’s clientele. It includes the reasons behind their business
launch as well as the elements that contribute to the group’s success or failure. The goal is to
research Future Group’s issues as well as the future of 7-Eleven and Reliance in India.

Rani, P. (2018) In this day of technology, the telecommunications industry is vital to keeping
people connected globally. India boasts the second largest telecommunications network in
terms of total phone customers, including both mobile and landline phones. In terms of
Internet subscribers, it also boasts the third-largest base telecom network. According to
figures given by the Internet and Mobile Association of India, there will be up to 500 million
internet users in India by June 2018. Therefore, it is necessary to evaluate the effectiveness
and financial performance of telecommunications businesses. Therefore, the researcher
attempted to compare the financial performance of Reliance Jio Telecom and BSNL in the
current study.

Chogule. etal, (2020) The majority of clients in urban areas prefer Jio, Airtel, and Idea as
their telecom connection, and in rural areas, they prefer Jio. The most scrutinized feature of
Jio is its network coverage, according to a statistical analysis of telecom service providers in
India. A significant portion of consumers select a three-month data package. The greatest
percentage of users utilizing every Jio VAS available. There is no correlation between the
number of telecom customers and region, and the average number of subscribers varies
depending on the telecom brand. While a small percentage of consumers are extremely
unhappy with the services offered by their telecom, most consumers are happy with their
telecom and will move to a different telecom company if it offers better services.
Additionally, while some consumers routinely visit their telecom’s official website, most
users do not. The characteristics People’s occupations and data usage are not correlated, and
neither are gender and recharge mode. However, the age, preferred service type, data plan,
and monthly income of telecom subscribers are not related to each other. The average call
rate satisfaction for Jio and Airtel differs significantly. Additionally, there is a bad correlation
between the satisfaction with customer service and the switch of telecom brands.

Chopra, S., & Chawla, P. (2018) Analyse the expansion of the Indian telecom industry
about its capacity for innovation and generation of intellectual property. It is important to see
the telecom industry's economic expansion holistically, which means that domestic Indian
telecom businesses need to be more well-positioned in the telecom value chain and globally
competitive. Researchers contend that to encourage investment in the development of
technological capabilities through R&D, the regulatory focus in India needs to change to one
of promoting and defending intellectual property.

Barot, B., & Japee, G. (2021) As of January 2021, India had 1,183.49 million subscribers,
firmly establishing itself as the world's second-largest telecom market. In the third quarter of
the fiscal year 2021, the telecom industry's gross revenue was an astounding US$ 9.35
billion. Unfortunately, small businesses have faced many difficulties over the last five years,
which has resulted in their untimely end at the hands of powerful telecom firms. Given these
circumstances, the purpose of this study is to examine the financial performance of India's
leading telecom firms after Reliance JIO entered the market. To better understand the
dynamics of the industry and the effects of Reliance JIO's presence, the study will make use
of indexes of profitability, liquidity, and solvency.

Khan, M. and Raj, K. (2020) The extant literature highlights the heightened competitiveness
within the Indian telecommunications industry, especially since Reliance Jio's arrival. The
industry is facing financial difficulties that raise the possibility of bankruptcy amid mergers
and increased competition. This study employs the Altman Z-score model to empirically
analyse liquidity and profitability with a focus on the industry's financial health. The findings
indicate a noteworthy influence of liquidity on Z-score, underscoring the necessity of
enhanced financial performance in Indian telecom enterprises to guarantee the
stability of the sector.

Marimuthu, Kn. etal, (2019) The arrival of Reliance Jio in 2016 caused a major upheaval in
the Indian telecom sector, leading to fierce rivalry and financial strain for established
competitors. This study uses a quantitative technique to evaluate the financial health of major
telecom service providers, specifically Vodafone Idea, RCOM, and Bharati Airtel, with a
focus on the years 2013–14–2018. The study used the Altman 'Z' score model to assess
financial stability in the face of the obstacles presented by Jio's market debut and the
ensuing dynamics.

Karthikeyan, K. (2023) This study examines the financial results of Bharti Airtel, Vodafone
Idea, and Reliance Jio—three of India's major telecom companies—during the last ten years.
With an emphasis on several financial indicators, including the debt-to-equity ratio, quick
ratio, asset turnover ratio, current ratio, and EBITDA, the study seeks to shed light on the
dynamics of the sector. The study illustrates dependency Jio's noteworthy asset turnover ratio,
Airtel's consistent liquidity ratios, and Airtel's changing debt dependency by comparing data
gathered from the Money Control website. The results indicate that Jio and Vodafone Idea are
in different financial situations, with Jio being stronger than Vodafone Idea.

Hao T.K, Ngoc L.T.B (2020) This study was aimed at investigating three factors (service
quality, brand image, and price perception) and assessed the degree of the impact of each
factor on customer satisfaction, especially the relationship between customer satisfaction and
customer loyalty in Vietnamese mobile telecom sector where there has been the existence of
the fierce competition, mature market, and internationally integrated economy, ultimately
struggling for market share and survival. The results indicated that each factor (service
quality, brand image, price perception) has a positive impact on customer satisfaction at
different levels as well as a significantly positive relationship between customer satisfaction
and customer loyalty in the mobile telecommunication industry in Vietnam. The results of
this study are consistent with the findings and evidence in the extant literature. The study
provides important feedback from customers to mobile telecom suppliers. Research findings
are expected to be marketing insights for Vietnamese mobile telecom managers so that they
can develop sound marketing strategies in today’s competitive and costly market.
 CHAPTER-3

Research Methodology
3.1 Research Design:
The framework or strategy for carrying out a research study is referred to as research design.
The document delineates the framework, approach, and protocols that will be employed to
investigate the research inquiries or goals.
3.2 Type of Study:
This study is Empirical, Comparative, and Analytical in nature. Depicted through various
charts, graphs & figures.
3.3 Type of Data:
Secondary Data
3.4 Data Collection:
For this study, 5 years of data have been collected from Moneycontrol.com of Indian telecom
companies from 2018-19 to 2023.
3.5 Tools Used:
In this study, for analysing and presenting data financial analysis tools like trend analysis and
ratio analysis is used.
3.6 Software Used:
Excel is used as a statistical tool to analyse data.
3.7 Statistical tool:
Ratio Analysis, Comparative & Common size statements, and Trend Analysis.
3.8 Evaluation Criteria:
3.8.1 Evaluation Criteria for Ratio Analysis:
Researchers have examined financial performance with the help of ratio analysis. We have
examined financial performance based on the following criteria:
1. Profitability:
We have examined Profitability with the help of the following three ratios:
• Gross Profit Margin = (Total Revenue – Cost of Goods Sold)/Total Revenue x 100.
• Operating Margin= (Operating Income /Total Revenue) x 100.
• Net Profit Margin= (Total Revenue – Cost of Goods Sold)/Total Revenue x 100.
2. Turnover Ratio:
• Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory.
• Asset Turnover Ratio = Sales/ Average Total Assets
3. Solvency Ratio:
• Debt Equity Ratio= Total Liabilities/Total Shareholder’s Equity
• Interest Coverage Ratio = Earnings Before Interest and Tax/Interest Expenses

3.8.2 Evaluation Criteria for Comparative Analysis:

Balance Sheet comparison of Jio and Airtel consisting of total liabilities, total assets, and
Shareholders funds of both companies.

3.8.3 Evaluation Criteria for Common Size Analysis:

Profit & Loss comparison of Jio and Airtel comprising total income, and total expense of both
companies.

3.8.4 Evaluation Criteria for Trend Analysis:

1. Product Offerings and prices
2. Market Share
3. Ownership and Business
 4. Customer Acquisition

CHAPTER-4
DATA ANALYSIS
4.1 RATIO ANALYSIS
4.1.1 JIO

1. Margin Ratios:
a. Gross Profit Margin (%): Margin Ratios Reliance Jio has demonstrated
extraordinarily high gross profit margins throughout the years, regularly surpassing
100%. This suggests that the business makes more money from its operations than it
spends on the costs of manufacturing its products and services. A gross profit margin
higher than 100% could indicate that the margin is being inflated by some non-
operational income or accounting adjustments.
b. Margin of Operation (%): Like its gross profit margin, Reliance Jio's operational
margin often surpasses 100%. This could point to effective cost control and
profitability, but it could also point to the existence of non-operating revenue or
accounting issues that are inflating the margin.
 c. Net Profit Margin (%): Over the years, Reliance Jio's net profit margin has
fluctuated significantly, exhibiting large variations. Even if the business is profitable,
the erratic margins point to possible profits and profitability volatility.
2. Solvency Ratios:
a. Debt to Equity (x): Reliance Jio's debt-to-equity ratio is extremely low, indicating a
little reliance on debt financing. This is one of the leverage ratios. This implies a more
prudent financial strategy and reduced financial risk for the business.
b. Interest Coverage Ratios (x): Reliance Jio continuously has a zero-interest coverage
ratio, a sign that operating income is insufficient to pay interest costs. This raises
doubts about the company's capacity to use its operating profits alone to pay off its
debt.
3. Turnover Ratios:
a. Asset Turnover Ratio (%): Reliance Jio generally has very low or even negative
asset turnover ratios, indicating inefficient use of its assets to produce income. This
can be a sign of inefficient operations or underuse of resources.
b. Inventory Turnover Ratio (x): According to the data given, Reliance Jio has a zero-
inventory turnover ratio for every year. This suggests that the organization is not
making the most of its inventory to create revenue, which may point to slow-moving
inventory, high inventory levels, or ineffective inventory management procedures.

Implications:

 Efficiency and Profitability: High operational and gross profit margins for Reliance
Jio show that the company is highly profitable and efficient. However, more research
into the company's earnings quality is necessary given the erratic net profit margins,
the existence of non-operational income, and accounting adjustments.
 Financial Stability: Reliance Jio's low debt-to-equity ratio is indicative of its
cautious financial structure and reduced risk. Concerns regarding the company's
ability to service its debt are raised, nonetheless, by its inability to meet interest costs
out of operational profits.
 Asset Utilization: Reliance Jio may not be making the best use of its assets to
produce income, as seen by its low asset turnover ratio. Increasing asset utilization
has the potential to improve profitability and operational effectiveness.
  Inventory Management: Reliance Jio is not efficiently managing its inventory to
produce revenue, as seen by the zero-inventory turnover ratio. Streamlining inventory
control procedures could save carrying costs and boost productivity.

In summary, even though Reliance Jio exhibits high profitability and sound financial
standing, there is still room for development in the areas of asset utilization, profits quality,
debt servicing capabilities, and inventory management. Taking care of these issues could help
the business continue to develop and be profitable.

4.1.2 AIRTEL

1. Margin Ratios:
a. Gross Profit Margin (%): Over the previous five years, Bharti Airtel's gross profit
margin has improved steadily, rising from 33.36% in March 2019 to 51.89% in March
23. This suggests increased revenue generation efficiency and profitability after
subtracting the cost of goods sold.
b. Margin of Operation (%): In a similar vein, the operating margin has been trending
upward, rising from 6.93% in March 2019 to 25.71% in March 23. This points to
improved operational cost control and higher operational profitability.
c. Net Profit Margin (%): Despite fluctuations, the net profit margin increased to a
positive 8.29% on March 23 after falling to negative levels in March 20 and 21.
Following periods of loss, the recent recovery suggests a return to profitability.
2. Leverage Ratios:
a. Debt to Equity (x): Over the previous five years, Bharti Airtel's debt-to-equity ratio
has varied, ranging from 1.52x to 2.2x. Greater financial leverage and possible debt
financing risk are indicated by a larger debt-to-equity ratio. Nonetheless, the ratio's
recent decline from 2.2x in March 21 to 1.82x in March 23 points to a fall in debt
compared to equity, which might improve financial stability.
b. Ratios of Interest Coverage (x): The interest coverage ratio calculates how much
operating income the business may use to pay interest costs. Over time, Bharti Airtel's
interest coverage ratio has improved, suggesting a greater capacity to pay interest.
 3. Inventory Turnover Ratio: From 378.25 in March 21 to 913.8 in March 19, Bharti
Airtel's inventory turnover ratio has increased significantly over time. The company is
selling its goods at a significantly faster rate, which suggests a significant
improvement in inventory management efficiency.

Implications: Better revenue generation and cost control are indicated by Bharti Airtel's
notable increases in profitability measurements, such as gross profit margin and operating
margin.

The debt-to-equity ratio is declining, indicating a favourable trend toward deleveraging that
may improve risk management and financial stability.

On the other hand, the drop in inventory turnover and asset turnover ratios highlights areas
that could use improvement and raises questions regarding operational effectiveness and asset
usage.

Although Bharti Airtel has improved its financial leverage and profitability overall, it may be
able to improve its financial performance going forward by managing its inventories and
maximizing the use of its assets.
 Reliance
Jio Reliance Bharti Bharti
Gross Jio Reliance Airtel Airtel Net
Profit Operatin Jio Net Gross Bharti Airtel Profit
Margin g Margin Profit Profit Operating Margin
Year (%) (%) Margin (%) Margin (%) Margin (%) (%)

2019 115.18 115.18 382.44 33.36 6.93 1.64

2020 92.08 92.08 65.83 43.88 12.25 -35.77

2021 77.45 77.45 41.68 45.73 16.5 -12.19

2022 119.01 119.01 113.07 49.82 21.43 5.04

2023 118.52 118.52 75.06 51.89 25.71 8.29

Chart Title
800
700
600
500
400
300
200
100
0
Reliance Jio Reliance Jio Reliance Jio Bharti Airtel Bharti Airtel Bharti Airtel
-100 Gross Profit Operating Net Profit Gross Profit Operating Net Profit
Margin (%) Margin (%) Margin (%) Margin (%) Margin (%) Margin (%)

2019 2020 2021 Reliance

2022 2023 Bharti
Reliance
Jio Bharti
Bharti Airtel
Bharti
Reliance
Reliance Jio
Interest Airtel
Airtel Interest
Airtel
JioJio
Asset
Debt Inventory
Coverage Debt
Assetto Coverage
Inventory
Turnover
to Equity Turnover
Ratios Equity
Turnover Ratios
Turnover
Year
Year Ratio
(x) (%) Ratio
(X) (X) (x)
Ratio (%) (X)
Ratio (X)

2019
2019 -0.03
1.36 -0.490 29.35
1.69 0.53
913.8

2020
2020 0.08
1.25 2.520 24.26
1.52 557.93
0.77

2021
2021 0.090 2.070 29.07
2.2 378.25
1.1

2022
2022 0.070 00 0.22
2 3.49 0

2023
2023 0.04
0 00 1.82
0.24 3.74 0
 Chart Title

Bharti Airtel Inventory Turnover Ratio (X)

Bharti Airtel Asset Turnover Ratio (%)

Reliance Jio Inventory Turnover Ratio (X)

Reliance Jio Asset Turnover Ratio (%)

-200 0 200 400 600 800 1000

2023 2022 2021 2020 2019

Competitive analysis

1. Profitability Ratios: When compared to Bharti Airtel, Reliance Jio continuously

shows larger operational and gross profit margins. This suggests that Reliance Jio is
more profitable and efficient at producing income after subtracting costs. Over time,
Bharti Airtel has seen gains in its net profit margin, whereas Reliance Jio has had
notable fluctuations in its net profit margin.
2. Leverage Ratios: When compared to Bharti Airtel, Reliance Jio has a far lower debt-
to-equity ratio, which suggests less financial leverage and possibly lesser financial
risk for the company. While Reliance Jio's interest coverage ratio is consistently zero,
raising questions about its ability to service debt, Bharti Airtel's interest coverage ratio
has generally remained positive, suggesting its ability to cover interest expenses with
operating income.
3. Turnover Ratios: The asset turnover ratios of both businesses are low or negative,
indicating inefficient use of assets to produce income. On the other hand, Bharti Airtel
has typically had a greater asset turnover ratio than Reliance Jio. Over time, Bharti
 Airtel's inventory turnover percentage has significantly improved, demonstrating
more effective inventory management. Reliance Jio, on the other hand, continuously
has a zero-inventory turnover percentage, indicating ineffective inventory
management.

Overall Analysis: Higher margin ratios and a lower debt-to-equity ratio show that Reliance
Jio is more profitable and stable financially than Bharti Airtel. Over time, Bharti Airtel has
demonstrated progress in lowering its debt levels, demonstrating its efforts to bolster
financial stability. The low asset turnover ratios of both organizations indicate inefficiencies
in their asset utilization. Enhancing asset management procedures could increase both
businesses' productivity and profitability. In conclusion, both businesses may enhance their
asset use and efficiency, even though Reliance Jio seems to be in a superior financial position
in terms of profitability and leverage. It could be required to conduct additional research and
take strategic steps to address these issues and improve overall financial performance.

4.2 COMPARATIVE STATEMENT ANALYSIS

4.2.1 JIO
4.2.2 BHARTI AIRTEL
4.3 COMMON SIZE STATEMENT ANALYSIS
4.3.1 JIO

4.3.2 BHARTI AIRTEL

4.4 TREND ANALYSIS
4.4.1 Product Offerings and Prices
Broadband, DTH television, and mobile services are just a few of the many telecom
services that Bharti Airtel and Reliance Jio provide.
Both businesses provide prepaid and postpaid mobile service plans with different data and
 voice allotments. With a variety of plans starting as low as ₹19 per day, Bharti Airtel
provides 1.5 GB of data per day along with unlimited calls. Along with a variety of options,
Reliance Jio also provides 1.5 GB of internet per day and unlimited calls for as low as ₹12
per day.
Additionally, both businesses provide broadband services; Bharti Airtel provides 100 Mbps
Fiber and DSL broadband plans. Plans for Fiber broadband with speeds up to 1 Gbps are
available from Reliance Jio.
Within the DTH market, Bharti Airtel provides Airtel Digital TV, which comes in a variety
of bundles with monthly rates as low as ₹99 and more than 500 channels. JioTV, a variety
of packages with rates as low as ₹99 per month and more than 600 channels, is provided by
Reliance Jio.
Notably, both businesses have been steadily growing their portfolios and attempting to
diversify their sources of income; Reliance Jio has been venturing into new markets like e-
commerce and online grocery, while Bharti Airtel has been expanding across digital media
through the launch of its streaming platform, Airtel Xstream.

4.4.2 Ownership and Business

As a result, the ownership structure of Jio and Airtel is one of their main distinctions. As an
independent business, Airtel is listed on the stock exchange and allows investors to buy its
shares directly. On the other side, as Jio is a Reliance Industries subsidiary, owning shares in
Reliance Industries is necessary to be exposed to Jio's performance.
Investors may be impacted by this variation in ownership structure. For instance, investors
with a focus on the telecom sector could be more inclined to fund a pure-play like Airtel than
a conglomerate like Reliance Industries. Furthermore, as Airtel is an independent business, its
shareholders benefit from openness as they are informed about the company's performance
and finances.

Their respective markets are another significant distinction between Jio and Airtel. With a
sizable client base and a lengthy operational history, Airtel is a well-known operator in the
telecom sector. However, Jio, a relatively new company, has quickly increased its market
share through aggressive pricing and cutting-edge offers. To be competitive, Airtel has been
investing in new technologies and services like 5G, IoT, and OTT services in addition to
attempting to grow its network and client base.
4.4.3 Customer Acquisition & Market Share

CHAPTER-5

FINDINGS OF THE STUDY

 Reliance Jio demonstrates high profitability and financial stability, but there is room
for improvement in asset utilization, profits quality, debt servicing capabilities, and
inventory management.
 On the other hand, Bharti Airtel has shown progress in profitability and financial
stability, but it can further improve its financial performance by managing inventories
and maximizing asset usage.
 Both companies offer a range of telecom services and have been expanding their
portfolios. The ownership structure and market presence differ between the two
companies, with Airtel being listed on the stock exchange and Jio being a subsidiary
of Reliance Industries.

CHAPTER-6

LIMITATIONS OF THE STUDY

 Current research work is based on the only past 5-year data on financial performance
of selected telecom companies.
 With current dynamic environment of business, financial performance of telecom
companies keeps changing, so further research can be done in this field.
  Economic conditions significantly impact the financial performance of companies,
and these factors may not be fully accounted for in the research.
 Regulatory changes and industry trends can significantly affect the financial
performance of companies, and these factors may not be fully accounted for in the
research.
 Financial performance can vary over time, so the period covered in the research
paper may not fully capture the dynamics of the companies' performance.
 Access to accurate and comprehensive financial data for both companies may be
limited, especially if they are private or do not disclose certain financial information .
 The research may focus on specific aspects of financial performance, such as
profitability or liquidity, while overlooking other important metrics or factors that
could influence performance.
 Airtel and Jio may operate in different markets or have different business models,
making direct comparisons challenging and potentially leading to misleading
conclusions.
 Financial performance metrics often provide only a partial view of a company's
overall health. Factors such as operational efficiency, strategic initiatives,
technological advancements, and competitive positioning may not be fully captured
by financial data alone.
 Fluctuations in stock prices, market sentiment, or investor behaviour can influence
perceptions of financial performance, but these factors may not be directly related to
the companies' operational performance.

CHAPTER-7

SUGGESTIONS
Regarding Reliance Jio:

 Boost Asset Utilization: To increase output and profitability, tackle the problem of
zero inventory turnover and streamline asset management procedures.
  Debt management: Jio has a reduced debt-to-equity ratio, but it is still important to
take care of the interest coverage ratio. Think about ways to increase your ability to
service debt and manage cash flow.
 Diversification: To increase income streams and lessen reliance on the telecom
industry, keep investigating new markets and industries like e-commerce and online
grocery shopping.

Regarding Bharti Airtel:

 Competitive Pricing and Offers: Considering Jio's aggressive pricing, Airtel should
concentrate on offering cutting-edge services at competitive prices to draw in new
clients and keep existing ones.
 Asset Turnover Improvement: Keep up the good work to raise asset turnover ratios
through better inventory control and more effective operations.
 Investing in New Technologies: To remain competitive and satisfy changing
customer demands, make investments in cutting-edge technologies like as 5G, IoT,
and OTT services.

CHAPTER- 8

CONCLUSION
Offering a variety of services like mobile, broadband, and DTH television, Bharti Airtel and
Reliance Jio are both major participants in the telecom industry. Jio's aggressive pricing
techniques and creative features have allowed it to quickly gain market share, despite Airtel
having a longer operational history and a larger market footprint. Comparing Jio with Airtel
financially, Jio has demonstrated greater profitability and less financial leverage.
Nonetheless, both businesses have issues with inventory control and asset turnover, which
points to inefficiencies in the use of assets.

Strong profitability and effective cost control are indicated by Reliance Jio's continuously
high gross profit margins and operating margins. Its net profit margin has, however, shifted
dramatically, indicating instability in earnings. The company's low debt-to-equity ratio
suggests a low-risk and prudent financial structure. Its zero-interest coverage ratio, however,
casts doubt on its capacity to pay off debt. Reliance Jio Limited must increase its asset usage
and inventory control because of its poor asset turnover and inventory management.
However, Bharti Airtel has demonstrated gains in profitability statistics, including operating
and gross profit margins. Its debt-to-equity ratio has decreased, suggesting that financial
stability and deleveraging are trending in the right trends. Better inventory management is
seen through Bharti Airtel's increased inventory turnover.
Both businesses can still do better overall, although Reliance Jio seems to be in a better
financial situation than Bharti Airtel.

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www.Moneycontrol.com

www.airtel.com

www.jio.com