Airtel’s revenue market share fell in March quarter, Idea’s rose

Bharti Airtel Ltd, India’s largest telecom service provider, reported a decline in its revenue market share in quarter ended 31 March, according to an IDFC Securities note.

Vodafone India Ltd and Idea Cellular Ltd, the nation’s second and third largest telecom operators, gained revenue market share in the same quarter, according to the IDFC Securities note, citing data compiled by the Telecom Regulatory Authority of India (Trai).

Bharti Airtel’s revenue market share declined by 5 basis points (bps) to 31.6% in the three months to 31 March 2016.

One basis point is one-hundredth of a percentage point.

In contrast, Idea increased its revenue market share by 38 bps in the fiscal fourth quarter. Idea Cellular’s gross revenue rose by 4.9% from the preceding December quarter. Vodafone India’s revenue market share rose by almost 6 bps.

Bharti Airtel also lost its market leadership in Punjab to Idea Cellular after its average revenue per user (Arpu) in the state fell 14% from the preceding three months, according to the IDFC Securities note. Bharti Airtel still leads in 11 out of 22 circles in India. There was no change for Vodafone in terms of market position as it retained its second position in 14 circles.

IDFC expects incumbent telecom firms to face increased competitive pressure after the launch of Reliance Jio Infocomm Ltd’s services later this year.

“We believe consolidation is good for the industry, but entry of Reliance Jio would disrupt the market in the interim,” the analysts at IDFC Securities mentioned in the note.

In a note on the Reliance Jio services last week, IDFC Securities said,“Apart from initial teething issues in activating the SIM, the overall experience of using the R-Jio connection was far superior to incumbents’ services. Seamless coverage along the highways, voice calls clarity, above-par experience of entertainment applications—especially Jio Play—and faster data speeds were the key highlights.”

The report said Bharti Airtel’s 4G network was the closest to offering such connectivity.

Fitch Ratings Inc. had said last month Bharti Airtel’s monthly revenue per user may fall by 5-6% after the entry of Reliance Jio.

Aircel Ltd and Telenor India gained 8 bps each, taking their revenue market share to 5.59% and 2.43%, respectively.

The IDFC Securities note analyzing industry performance in terms of revenue growth and market share for the fourth quarter of the previous financial year said that Reliance Communications Ltd and Bharat Sanchar Nigam Ltd were among the losers, with a loss of 24 bps each.

The top three companies continued to dominate the industry with 74% control.