Lockdown hurt Vodafone Idea market share most, Jio-Airtel benefit

The April-June quarter took a major hit on key Vodafone markets to plunge its revenue market share to 23% from 29% last quarter according to Telecom Regulatory Authority of India data on telecom revenues for Q1 FY21. Bharti Airtel and Reliance Jio reported significant gains to improve their market share to 34% and 41% respectively.

Vodafone Idea’s massive QoQ dip in revenue market share (RMS) was led by key circles like Delhi, Mumbai, Haryana and Himachal Pradesh reporting massive drops in adjusted gross revenue (AGR) from the regions. The management had already pointed out that the inability to recharge digitally during the lockdown had hurt their 2G customer base.

TRAI's latest disclosures indicate that while lockdown adversely impacted urban markets, rural markets continued to deliver revenue growth, said a report by Jeffries. During 1QFY21, net mobile revenues in India fell mere 1% QoQ to an annualized $21.7 billion despite the strict lockdown. The sequential fall in revenues was led by urban markets with Metro cities reporting a 20% QoQ decline in revenues followed by A-circles which reported 3% QoQ decline. Rural centric B-circle and C-Circles reported a 1-14% QoQ growth respectively. As a result, the share of rural centric markets rose beyond 50% for the first time ever. Reliance Jio has reported major gains in the markets where Vodafone Idea reported major dip in market share.

“While Bharti Airtel and Reliance Jio gained 200-470 basis points (bps) revenue market share, Vodafone Idea lost 580bps share, with its top-3 markets contributing to 60% of its market share loss. The magnitude and the nature of Voda-Idea's market share loss indicates that the market is moving steadily towards a duopoly,” said the Jeffries report.

Telco revenues were further impacted industry revenue growth was impacted by lockdowns that resulted in non-availability of offline recharges, lower international roaming revenues and fewer subscriber adds.

“Vodafone Idea’s RMS contracted 6.17% QoQ (7.61% yoy), excluding the impact of BSNL in the base quarters. Much of the sequential fall can be attributed to major circles like Delhi (-89%), Mumbai (-40%), Kerala (-39%) and Himachal Pradesh (-50%). AGR for the Top-7 circles, which contribute 62% to total revenues, was down 26% QoQ,” said a report by Emkay Global yesterday.

On the other hand, Jio commands the top position in 18 circles now, up from 15 circles in the previous quarter. Three circles which got added to the number one position are Delhi, Maharashtra and AP. There was a reshuffling for top rank between North East and J&K circle. Jio’s growth was led by a combination of successful tariff hikes and availability of digital recharge options during the lockdown. Similarly, Bharti Airtel also reported a sequential growth of 7% from top circles although its revenue across top urban circles was also impacted on QoQ basis.

Industry AGR grew 7% year on year and declined 6.4% QoQ to ₹368 billion due to the lockdown impact, according to assessment by ICICI Securities. However, these numbers are not comparable to the past as BSNL did not release Q1 numbers.