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Telecom revenue fell 10% in 2018 over cutthroat competition and tariff war

Spectrum usage charges (SUC) yearly declined 17.74 per cent, from Rs 5,089 crore in 2017 to Rs 4,186 crore in 2018

Megha Manchanda  |  New Delhi 

Telecom, Telecom sector

The telecom industry’s adjusted gross revenue, an indicator of the sector's financial health, was down by 10.18 per cent in 2018 as incumbent mobile service providers — Bharti Airtel and Vodafone Idea — battled stiff competition from Reliance Jio, according to official data.

The Telecom Regulatory Authority of India (Trai) on Wednesday said gross revenue (GR) declined from Rs 2.55 trillion in 2017 to Rs 2.37 trillion in 2018, with yearly decline rate of 7.13 per cent. Adjusted gross revenue (AGR) also declined from Rs 1.60 trillion in 2017 to Rs 1.44 trillion in 2018, with yearly decline rate of 10.18 per cent.

Experts believe that the reason for the fall in AGR is cutthroat competition and a tariff war in the sector after the entry of Reliance Jio.

“When Reliance Jio slashed prices, others (Bharti Airtel and Vodafone Idea) were forced to do it, which led to a significant fall in AGR,” independent telecom expert Mahesh Uppal said.

Telecom revenue fell 10% in 2018 over cutthroat competition and tariff war

Spectrum usage charges (SUC) yearly declined 17.74 per cent, from Rs 5,089 crore in 2017 to Rs 4,186 crore in 2018. Licence fee also yearly declined by 10.29 per cent, from Rs 12,976 crore to Rs 11,641 crore during the same period, said Trai’s yearly performance indicators of the telecom sector.

Analysts feel that the decline in SUC and licence fee is because of a cut in AGR and since these payments are linked to AGR, there was a reduction in the government’s revenue.

Trai on Wednesday released the third edition of the ‘Yearly Performance Indicators - Indian Telecom Sector’ for the Calendar Year 2018, which provides a broad perspective of in India.

The report also presents the key parameters and growth trends of the as well as Cable TV, DTH and radio broadcasting services for the period covering January 1, 2018, to December 31, 2018. It is compiled mainly on the basis of the information furnished by the service providers.

According to the data, after merger, Vodafone Idea became the market leader with 34.98 per cent market share of the telephone subscription at the end of December 2018 and Bharti Airtel slipped at second position with 28.74 per cent market share. Reliance Jio Infocomm added maximum number of telephone subscribers (120.03 million net addition) during 2018.

Vodafone Idea is the service provider with highest proportion of rural subscribers (52.67 per cent), followed by Bharti Airtel (48.98 per cent) to their total number of telephone subscribers at the end of December 2018.

Total wireless (GSM+CDMA) subscriber base increased from 1,167.44 million at the end of December 17 to 1,176.00 million at the end of December 2018, a yearly growth rate of 0.73 per cent.

During 2018, net addition of 8.56 million wireless subscribers was recorded. The rural wireless subscribers increased from 499 million at the end of December 17 to 528.48 million at the end of December 2018, an yearly growth rate of 5.91 per cent.

The urban wireless subscribers declined from 668.44 million at the end of December 2017 to 647.52 million at the end of December 2018, an yearly decline rate of 3.13 per cent.

First Published: Wed, September 25 2019. 22:38 IST
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