Bharti Airtel became largest telco in revenue terms in 4QFY21, India Ratings

India Ratings and Research (Ind-Ra) has published the June 2021 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, pricing and regulatory and industry updates.

Industry-wide Revenue (ex-Vodafone Idea) Increased in 4QFY21; Bharti Airtel Reported Highest Revenue: As per the Telecom Regulatory Authority of India data, the industry-wide adjusted gross revenue (revenue: AGR, including national long-distance revenue; excluding Vodafone Idea Limited (VIL)) increased by 3% quarter on quarter (qoq) to INR361 billion in 4QFY21 (3QFY21: INR351 billion). This increase in revenue is largely supported by 13% qoq growth in revenue  of Bharti Airtel Limited, including Tata Teleservices Limited and Tata Teleservices (Maharashtra) Limited. While AGR for BAL (Including Tata tele) increased significantly to INR164 billion in 4QFY21 (3QFY21: INR145 billion), AGR for Reliance Jio Infocomm Limited declined to INR163 billion (INR174 billion). Therefore, BAL became the largest telco in terms of revenue in 4QFY21, surpassing RJio, though by a fraction.

One of the Strongest Wireless Subscriber Growth Rates in over 2.5 years: The industry-wide wireless subscriber base grew by strong 13.2 million subscribers in March 2021 to 1,181 million subscribers on a month-on-month (mom) basis, which is the highest addition in subscribers in more than two and a half years. The growth in industry wide subscribers was attributable to all the three large telcos, led by RJio (7.9 million), followed by BAL (4.1 million) and VIL (1.1 million). While RJio continues to be the largest telco by subscriber market share in India and BAL continues to report growth in its subscriber market share, VIL, which was consistently losing subscribers, reported growth in subscribers for the second month in a row in March 2021. The visitor location register subscriber base, which shows active subscribers, also grew by strong 12.0 million subscribers in March 2021 to 994 million subscribers.

While Broadband Penetration Continues to Rise, ARPU Declined in 4QFY21: The number of broadband subscribers increased to 64% of the overall wireless subscriber base in March 2021 from 63.6% in February 2021 and 47% in March 2019. In March 2021, the number grew by strong 12.5 million (February 2021: 7.9 million). Additionally, the average data used per user is increasing rapidly. The sliding voice tariffs, growing data tariffs, increasing data usage per subscriber, increasing data subscribers in the overall subscriber base and reducing tariff differentials among the telcos, over the last one year, indicate that the industry is moving towards a higher average revenue per user (ARPU) regime. However, ARPU of the telcos reduced in 4QFY21, primarily due to a reduction of interconnect usage charges to INR0.0 per minute effective 1 January 2021 from INR0.06 per minute, while remaining higher than 4QFY20 ARPU on a comparable basis. BAL reported a dip in its ARPU to INR145 in 4QFY21 (3QFY21: 166), while RJio reported a dip in its ARPU to INR138 (INR151). ARPU of VIL also dipped to INR107 in 4QFY21 from INR121 in 3QFY21. The agency believes that movement in the ARPU needs to be monitored over the next two to three quarters.
CT Bureau