India’s top mobile phone companies – Bharti Airtel, Vodafone India and Idea Cellular – have reported a sharp sequential fall in their adjusted gross revenue (AGR) in the fiscal fourth quarter ended March, following another quarter of free voice and data services from Reliance Jio Infocomm.
Sunil Mittal-led Bharti Airtel’s AGR in the March quarter was down 9.9 per cent sequentially to Rs 10,400 crore, while that of Vodafone India and Idea fell 12.6 per cent and 8 per cent to Rs 7,300 crore andRs 6,400 crore, respectively, brokerage ICICI Securities said, analysing data provided by the Telecom Regulatory Authority of India (Trai).
AGR has dropped “nearly 22 per cent on-year and 14 per cent sequentially to Rs 29,700 crore in the March quarter on intense competitive pressure unleashed by Jio,” Sanjesh Jain, research analyst at ICICI Securities, said in a note to clients. The plunging AGR numbers come at a time when the telecom regulator is tipped to meet heads of telcos mid-June to discuss the financial stress in the sector and seek suggestions on possible ways to ease the situation.
That is expected to be followed by another meeting between telecom minister Manoj Sinha and the promoters of the phone companies on June 22-23 on the financial crisis plaguing the debt-laden industry. Nevertheless, the Big 3 of Indian telecoms have registered onyear gains in their respective AGR market shares in the March quarter regardless of heightened competition triggered by Jio’s entry last September.
For instance, Bharti Airtel’s AGR market share in the March quarter rose 315 basis points (bps) on-year to 34.9 per cent, while Vodafone and Idea’s climbed 170 bps and 135 bps to 24.4 per cent and 21.5 per cent respectively. A basis point is 0.01percentage point.
“Bharti improved its AGR market share across buckets. In the 900 MHz circles, its AGR market share rose 390 bps on-year to 45 per cent, while in the 1800 MHz circles, it improved to 22.1 per cent, up 135 bps year-on-year,” said brokerage ICICI Securities in a note.
Vodafone India, it said, also improved AGR market in established circles by 180 bps on-year to 26.7 per cent while in the new circles it rose 135 bps on-year to 13.7 per cent. Third-largest carrier Idea Cellular also saw its AGR market share bounce back in established and emerging circles to 36.8 per cent and 12.6 per cent, respectively, while in the new circles, it continued to grow at 6.4 per cent.
Not surprisingly, the combined AGR market share of Airtel, Vodafone India and Idea rose sharply by as much as 625 bps on-year to 80.8 per cent in the fiscal fourth quarter ended March. In a separate note, brokerage HSBC said the Big 3 telcos also held on to their 75.3 per cent combined revenue market share (RMS) in the March quarter despite Jio’s disruptive launch.
Among smaller players, Tata Teleservices had the sharpest RMS decline in the past 11 quarters by 60 bps sequentially to 5.6 per cent while Aircel’s fell 50 bps on-quarter to 5 per cent, said HSBC. Anil Ambani-led Reliance Communications, the brokerage said, was “an exception, seeing a sequential jump in RMS in the March quarter to 5.2 per cent from 4 per cent in the previous one.”