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MOSL: TELECOM-Consistency in industry growth; RJio’s turns no 1, gaining

TELECOM: Consistency in industry growth; RJio’s turns no 1, gaining significant share from VIL; Bharti steady

 

• The Telecom Regulatory Authority of India (TRAI) has released the industry's revenue report for 1QFY20. According to the data, industry growth (adjusted AGR*) has remained consistent for the fourth straight quarter now (+3.7% QoQ to INR342b).
• RJio continued delivering strong growth (+9% QoQ), turning number one with a 31.8% market share (+150bp QoQ). VIL witnessed a decline of 9% QoQ, falling to the number three position with a 380bp market share loss to 27%.
• Bharti's revenue trajectory appeared to have bottomed out, with estimated 3% QoQ growth and 20bp market share loss to 30.1% (adjusted for estimated bad debt) - which is encouraging in the current competitive landscape.
• RJio gained market share in 21 of the 22 circles and is now a leader in 14/22 circles (four in 3QFY19). Bharti's market share remained stable across circles; it is now the leader in only three circles (v/s nine in 3Q). On the other hand, Vodafone Idea is the leader in five circles (v/s nine in 3Q).
• RJio gained significant market share from VIL due to the latter's still ongoing network integration and upgradation. Bharti's share appears to have largely stabilized. Thus, even as downtrading is largely behind, industry ARPU accretion would have to wait until there is a reduction in the hunt for market share - a situation that could be 3-4 quarters away (when VIL network will stabilize), in our view.