Telecom players focused on revenues than subscribers: study

The telecom operators in the country focused on revenues than on increasing subscriber numbers, a move in the right direction, according to a report by global financial services firm Morgan Stanley.

The study is based on the financial data for the September-December 2008 quarter, released by the Telecom Regulatory Authority of India (Trai). It has not taken into account the record 15.4 million users added in January this year.

During the reporting quarter, Bharti Airtel increased its wireless subscriber market share to 24.7 per cent (adding 12 basis points), while its wireless revenue market share rose to 29.7 per cent (adding 90 basis points). Including wireline segment, Bharti Airtel has 22.9 per cent subscriber market share and overall revenue market share of 26 per cent, the report said.

“This supports our view that the company is more focused on revenues than on subscribers,” it added.

Likewise, Idea Cellular increased its wireless subscriber market share to 9.9 per cent (by 23 basis points), and its wireless revenue market share to 10.1 per cent (by 60 basis points).

“We think Idea Cellular is going in the right direction with revenue market share inching up faster than its subscriber market share,” it said.

However, on Reliance Communications (RCom), Morgan Stanley estimates that the company’s wireless subscriber market share fell to 17.7 per cent (9 basis points), while wireless revenue market share dipped to 16.7 per cent (94 basis points).

The gap between its wireless revenue and subscriber market shares rose to 100 basis points during the quarter.

The interconnect as a percentage of the total Trai revenues was in the higher range of 26-31 per cent for all players, but reported earnings were higher for pure mobile operator Idea and lowest for integrated telecom operator RCom at 8 per cent. This could be because RCom has the highest on-net calls, which helped it lower interconnect cost as percentage of the total revenues.