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RJio Remains Biggest Beneficiary of Market Consolidation- India Ratings & Research (Fitch Group)

Ind-Ra-New Delhi-11 July 2018: India Ratings and Research (Ind-Ra) has published the May 2018 edition of its credit news digest on India’s telecom sector. It highlights the trends in the telecom sector with a focus on subscriber additions, subscriber market share, broadband subscribers, data usage and pricing.

Key highlights of the report include Ind-Ra’s views that content is emerging as the key differentiator and revenue generator in the intensely competitive telecom market. All major telcos are focusing on converting their applications into one-stop place for subscribers wherein a wide range of options in music, movie, sports, television, among others are available to increase data consumption and retain/increase market share.

Decline in Subscriber Base: A decline in subscriber base to 1,125 million in April 2018 from 1,183 million in March 2018 could be attributed largely to closure of Aircel Limited’s services in various circles and disruption in its interconnect services. All other telcos excluding Aircel reported net subscriber addition of 15.8 million in April 2018. Aircel had 74 million subscribers in March 2018. 

Subscriber Market Share: RJio’s subscriber market share increased 7.9% yoy to 17.5% in April 2018. The share of the top three telcos (Airtel, Vodafone and Idea) increased to 65.4% from 58.1% during the same period. Based on April 2018 data, Bharti Airtel Limited’s (Bharti) subscriber market share (including Tata Teleservices Limited and Telenor (India) Communications Private Limited) was 33.3% (February 2018: 31.5%) and Vodafone-Idea combined was 37.9% (36.4%).

AGR-Based Revenue Market Share: Based on adjusted gross revenue (AGR) for QE March 2018 reported by Telecom Regulatory Authority of India, the combined revenue market share of Bharti, Tata Teleservices and Telenor (India) Communications fell 230bp qoq, while Vodafone and Idea combined gained 50bp. RJio registered the largest revenue market share increase of 460bp, followed by Bharat Sanchar Nigam Limited, which gained 210bp. The remaining telcos combined reported a 480bp decline in the revenue market share. 

Continued Growth in Broadband Subscribers: Broadband subscriber base increased by 7.2 million to 401 million in April 2018, growing by an average monthly growth rate of 3.3% over the last 12 months. During the last 12 months ended April 2018, RJio’s broadband subscriber market share increased 700bp to 47% while the other three major telcos together reported a 500bp increase. 

 

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