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MOSL: TELECOM-RJio, large players expand market share; ARPU down-trading pulls down industry revenue by 9%

TELECOM: RJio, large players expand market share; ARPU downtrading pulls down industry revenue by 9%

 

The Telecom Regulatory Authority of India (TRAI) released the telecom industry’s 3QFY18 revenue report. The industry’s adjusted gross revenue declined 9% QoQ to INR351b, impacted by ARPU downtrading. Despite this, incumbents – Bharti, Vodafone and Idea – continued to protect their turf, gaining 40-50bp market share. RJio’s market share expanded 390bp QoQ to 15.3%, largely at the cost of smaller players, which lost 490bp. The key point to note is that the vulnerable smaller operators still hold a 16.3% market share.

 Industry gross/adjusted gross revenues (AGR) continue to fall

• Industry’s gross/adjusted gross revenue (AGR) (including NLD/ILD) declined 10%/9% QoQ to INR534b/INR350b, highlighting continued downtrading in ARPUs and the shift toward RJio’s low-ARPU offerings.

 Incumbents protect their turf in a falling market

Bharti, Vodafone and Idea gained market share, but saw a steep revenue decline due to ARPU downtrading and IUC cut

• Bharti’s market share expanded 40bp QoQ to 31.5%. AGR revenue declined 8% QoQ to INR110b. However, excluding the impact of NLD/ILD revenue, Bharti’s AGR revenue declined 13% QoQ to INR77b, while its market share shrunk 90bp QoQ to 28%. Because Bharti has been a net gainer of IUC (which was cut by 57% to INR0.06), it was hurt more than peers.
• Vodafone’s market share increased 50bp QoQ to 20.4%, with AGR revenue declining 7% QoQ to INR72b. Excluding the impact of NLD/ILD revenue, AGR revenue was down 10% QoQ to INR57b.
• Idea gained 40bp QoQ market share, with its AGR revenue declining 7% QoQ to INR58b. Excluding the NLD/ILD revenue impact, AGR revenue was down 11% QoQ to INR47b.