Jio becomes the market leader with 31.7% AGR, telcos record 9% growth

The telecom sector’s year-on-year (YoY) revenue growth returned to positive in the June quarter — the first time since the third quarter of 2016-17 (FY17) — to Rs 34,300 crore, driven primarily by average revenue per user (ARPU) growth, shows data by the Telecom Regulatory Authority of India (TRAI). 

Reliance Jio’s adjusted gross revenue (AGR) grew 9 per cent sequentially to an industry-leading revenue market share (RMS) of 31.5 per cent. State-owned Bharat Sanchar Nigam (BSNL) sprung in a surprise by clocking a 33 per cent sequential jump in revenues. AGR is gross revenue minus access and pass-through charges.  

Bharti Airtel, on the other hand, has grown at the cost of Vodafone Idea — its AGR grew 17.9 per cent YoY in the 1,800 Mhz circles (which were traditionally dominated by Vodafone and Idea), while in the 900 Mhz circles dominated by Airtel, the company grew 8.1 per cent. This shows that Airtel has gained market share at the cost of Vodafone Idea. 

ICICI Securities noted: “Reliance Jio became the market leader with 31.7 per cent AGR, including national long distance (NLD) market share. Vodafone Idea’s AGR, including NLD, dipped 5.1 per cent quarter on quarter; and market share fell to just 28.1 per cent.” Airtel’s market share, including NLD revenues, improved to 30 per cent from 27.2 per cent in the previous quarter, while Vodafone Idea's market share fell to 28.1 per cent in Q1FY20 from 32.1 per cent in Q4FY19. 

Overall AGR for the industry, including NLD revenues and excluding Reliance Communications, increased 9 per cent sequentially and 7 per cent YoY to Rs 34,300 crore in Q1FY20. Emkay Global said the sequential growth was driven by a rebound in Airtel’s revenues, continued growth for Jio and a 33 per cent jump in BSNL’s revenues. ICICI Securities noted: “Industry returns to positive AGR, including NLD, growth YoY since Q3FY17 to Rs 34,300 crore. This was driven by industry ARPU (based on AGR) growth of 6.6 per cent YoY at Rs 98."

Vodafone Idea, on the other hand, continued to see pressure with 5 per cent quarter-on-quarter (QoQ) revenue decline and revenue market share (RMS) loss. Airtel and Vodafone Idea’s RMS, excluding NLD, revenues stood at 27.7 per cent and 24.9 per cent, respectively. Vodafone Idea lost market share in 19 of 22 circles, which contributes 91 per cent to its total AGR, noted Emkay analysts. Emkay's circle-wise analysis is based on AGR without NLD revenues. 

Jio’s AGR, including NLD, grew 9 per cent sequentially to Rs 10,880 crore in Q1FY20. It registered a sharp fall in NLD revenues sequentially, which along with Airtel’s AGR have registered RMS expansion. Jio continues to enjoy a strong position in B and C circles and commands the number one position in 13 circles, similar to the last quarter. These circles contribute 56% to Jio’s revenues and 45% to industry revenues. 

Bharti Airtel’s AGR, including NLD, rose 19.5 per cent QoQ and 1 per cent YoY to Rs 10,290 crore in Q1FY20. It reported revenue increase in key circles such as Delhi, Karnataka, Mumbai, and Tamil Nadu, among others. Vodafone Idea’s AGR came in at Rs 9630 crore, a 5 per cent QoQ and 14 per cent YoY decline.

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