Bharti Airtel, Vodafone & Idea control 74% of market

Top 3 players continue to gain revenue market share in Q4 at expense of fringe players

The three big boys of Indian telecom — Bharti Airtel, Vodafone and Idea — continued to dominate the market-share sweepstakes in the March quarter. All three large incumbents increased their revenue market-share (RMS), mainly because of new subscribers. The smaller players like Reliance Communications, Tata Tele and Aircel continued to lose RMS during the quarter.

“The underlying business trend of incumbents gaining market share from fringe players continued with the top three players adding 218 basis points YoY and controlling 74 per cent of the market now,” says IDFC Securities in a note.

The industry’s adjusted gross revenues during the March quarter rose 5.2 per cent year-on-year to Rs 49,500 crore. Together Bharti Airtel, Idea and Vodafone captured 93.7 per cent of the incremental RMS. With many smaller players struggling to keep pace with the changing consumer preferences (increased data usage), the smaller players are losing out to the bigger players who have stepped up investments to improve data penetration and coverage.

Among challengers, Reliance Communications lost the most in terms of RMS as it could not renew 900 MHz spectrum in five circles in the March 2015 auctions. RComm’s RMS thus declined to 3.6 per cent at the end of March 2016 from 4.2 per cent in December 2015.

In FY16, the industry’s adjusted gross revenues rose 12.3 per cent y-o-y to Rs 147,600 crore, says ICICI Securities, led by the jump in the top three’s adjusted gross revenues. The three telcos have exited FY16 with a combined RMS of 73.7 per cent (up 190 basis points y-o-y).

Market leader Bharti Airtel’s RMS at the end of March quarter stood at 31.7 per cent. While sequentially Bharti’s RMS declined by 10 basis points, it was up 110 basis points compared with the previous year. The telecom operator did well in the 900 MHz and 1800 MHz circles but continued to lose out in Punjab and Kerala.

Idea, on the other hand, fared well across categories and its RMS rose 140 basis points y-o-y and 67 basis points sequentially to 20.2 per cent. Vodafone’s RMS during the quarter stood at 22. 7 per cent, down 30 basis points sequentially but up 30 basis points compared to corresponding period last year. In a note, ICICI Securities says: “Vodafone’s adjusted gross revenue market share improvement could be partly attributed to 2G ICR agreement with RComm. RComm lost 900 MHz spectrum in five circles — West Bengal, Bihar, Odisha, Assam and North-East, and these are circles where Vodafone gained incremental AGR market share.”