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Bharti Airtel sees 13 million 4G adds in Q3; VIL at 4 million
Bharti Airtel had led 4G with 13 million net adds in the third quarter ended December 31, while Reliance Jio Infocomm (RJio) had the lowest of five million since launch, brokerage firm CLSA said in a report.
Vodafone Idea Ltd’s (VIL) 4G adds were at four million, but three million of these were upgrades of its own data subscribers from 3G. The Average Revenue Per User or ARPU (a financial metric for a telecom company) for all the three telecom companies rose by 12-23 per cent on a year-on-year basis (2-4 per cent quarter-on-quarter), while mobile data traffic rose 34 per cent YoY.
Bharti Airtel’s Arpu at ₹166 was 10 per cent higher than RJio and 24 per cent higher than VIL, while the industry ARPU is headed to ₹200. The combined mobile revenues of the top three telecom operators grew 22 per cent on a year-on-year basis and 5 per cent on a quarter-on-quarter basis to ₹44,200 crore, it said.
Bharti’s data traffic was up 52 per cent YoY (11 per cent QoQ), that of RJio at 55 per cent and VIL under 16 per cent share. Bharti’s data usage per subscriber at 16.7 GB per month was 29 per cent ahead of leading 4G player RJio, it said.
VIL’s net debt, excluding Adjusted Gross Revenues and leases, is still “enormous” at $16 billion and includes $13 billion of deferred spectrum payments, which however have a two-year moratorium. VIL is working on fund-raising of $3.4 billion and of this equity will likely be $2 billion.
According to India Ratings and Research (Ind-Ra), a turnaround in the telecom sector has been “visible for the past four to five quarters”. This is due to a moderation in the competition intensity (resulting in waning tariff differentials), increasing data penetration (supporting growth in ARPU) and a growing subscriber base.
“A combination of these factors is resulting in an overall improvement in the operational and financial parametres of telecom companies,” it said, adding the sector is moving towards a higher ARPU regime, which along with the growth in the subscriber base is expected to continue to result in higher revenue for telcos.
“This, along with a conducive regulatory environment and a possible pick-up in the data usage and enterprise business activities led by Covid-19, is expected to benefit the telecom companies at large,” Ind-Ra said.
According to BNP Paribas, about 69 per cent of industry subscribers use 4G services, but there are still over 300 million consumers who are yet to adopt 4G, signifying an opportunity for the industry.
“We believe that a tariff hike remains a matter of time and that VIL with its weakest market position might need to take lead. We expect industry consolidation to continue with Airtel and RJio continuing to gain share until VIL is able to complete its fundraise and ramp up its network investment. We expect industry revenue growth to remain strong led by a potential tariff hike and more customers adopting 4G,” BNP Paribas said. The Hindu BusinessLine