Bharti Airtel Ltd, India’s largest telecom operator, and Idea Cellular Ltd, the third largest, are the only telecom operators to have increased revenue market share (RMS) in 2015, according to data from the Telecom Regulatory Authority of India (Trai) and company filings.
The remaining telecom operators have either lost revenue market share or maintained it.
Vodafone India Ltd, the country’s second largest telecom operator, ended 2015 with a flat RMS of around 23%, gaining in 10 circles, losing in seven and consolidating its leadership position in Mumbai and Kolkata.
Bharti Airtel’s RMS rose 70 basis points over the previous year to 31.6%, driven by a sharp increase in five markets (the biggest being in Andhra Pradesh, Karnataka and Mumbai) in the last quarter. Idea’s RMS gained 40 basis points in the December quarter to 18.9%, gaining in 19 circles (the biggest being in Punjab, Maharashtra and Andhra Pradesh). A basis point is one-hundredth of a percentage point.
Interestingly, the top three telecom firms accounted for 73.6% of RMS, or almost three quarters of the sector’s revenue.
“Combined RMS of the top three telcos increased by 80 basis points this quarter to 73.6% and was up 180 basis points (year-on-year), highlighting that quasi sector consolidation continues and implying incumbent telcos have a higher share in data revenues," Rajiv Sharma, telecom analyst with HSBC Securities and Capital Markets (India) Pvt. Ltd, wrote in a 26 February report.
Trai released its subscription data last week.
Analysts attributed the growth to the increased focus on deploying data services across the country, thereby increasing revenue from data, at a time when telecom firms are facing a lot of pressure on both voice and data tariffs. Bharti has expanded its 4G services in 15 circles across the country, while Idea is in the process of expanding to 10 from eight circles rolled out so far. Vodafone has completed its first phase with roll-outs across five circles—Delhi, Mumbai, Kolkata, Karnataka and Kerala.
“Third quarter, being a festive quarter, is generally a strong quarter. However, due to tariff pressures on both voice and data, revenue growth seen in the quarter was muted at 1.7% quarter-on-quarter (versus 4.6% in the same quarter last year). That said, we expect voice rates to stabilize in the fourth quarter and hence expect revenue growth to improve versus the third quarter," the HSBC report said.
Delhi continued to account for the highest revenue market share among 22 circles, at around 8%.
The change has many analyst optimistic of Bharti’s prospects, given the expected change in the telecom sector’s environment over the next few quarters, with Reliance Jio Infocomm Ltd readying to launch its services, and the spectrum auction.
“The latest Trai data reveals that during the 9MFY16 (first nine months of fiscal 2016), Bharti Airtel’s revenue market share increased by 70 basis points YoY (year-on-year) to 31.4%, the highest since the 2010-11 financial year," Deepti Chaturvedi and Akshat Agarwal, analysts with Mumbai-based CLSA Research, said in a report on 25 February.
“Moreover, the pace of market share gains has accelerated, with the company gaining nearly as much share over 9MFY16, as it did over FY12-15 (80 basis points)," the report added.