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Market Share Tracker: Robust industry AGR growth aided by tariff hike

June 14, 2022

Industry AGR (incl. NLD) grew 16.1% YoY / 7.4% QoQ to Rs511bn aided by tariff hike wef Nov/Dec’21. Bharti Airtel has gained AGR (incl. NLD) market share of 70bps QoQ (30bps YoY), which shows strong execution, and has been steadily winning market share. Bharti had strong show in nine circles where it had >100bps market share gain QoQ in Q4FY22. VIL lost small AGR (incl. NLD) market share of just 6bps QoQ to 18.3%. It had performed well in established circles, while AGR grew slower in few leadership circles. RJio’s AGR (incl NLD) market share rose 30bps QoQ to 40.9%, but historically, we have seen delayed impact of tariff hike for RJio on larger long validity customers, which means real analysis on the benefit of tariff hike can be ascertained only after Q1FY23 AGR release.

Industry AGR (incl. NLD) rose 16.1% YoY / 7.4% QoQ to Rs511bn. Top-3 operators’ AGR (incl. NLD) rose 19.5% YoY / 8.4% QoQ benefiting from tariff hikes. The benefit of premiumisation has been limited and SIM consolidation should have offset some growth. Q4FY22- annualised revenue stood at Rs2,046bn, and AGR (incl NLD) was Rs1,900bn for FY22, which was up 12.6%. Industry gross revenue was up 18.5% YoY (10.3% QoQ) to Rs583bn, and had one-off gains in BSNL.
Bharti’s AGR (incl. NLD) was up 17.2% YoY / 9.4% QoQ to Rs185bn. Bharti’s AGR (incl. NLD) market share rose to 36.1%, up 70bps QoQ / 30bps YoY. Its incremental AGR QoQ was Rs16bn vs Rs16bn for RJio. This is enabling Bharti to steadily win market share, which shows its incremental AGR has been higher than its existing share. Bharti has gained >100bps market share QoQ in nine circles (Gujarat, Punjab, Haryana, UP east, UP west, WB, Bihar, Assam and NE). The two underperforming circles are AP and Karnataka. Bharti has significantly outperformed in circle B’ and C’ where AGR grew 12.2% and 14.6% QoQ.
VIL’s AGR (incl. NLD) market share dipped to 18.3% (down 6bps QoQ). VIL’s AGR (incl. NLD) rose 7.4% YoY and 7.1% QoQ to Rs94bn. Within leadership circles Maharashtra, Gujarat, TN and Kerala underperformed while UP east, AP and Mumbai have done well. VIL’s established circles have done well with AGR growth of 12.7% QoQ. Non-focus circles continue to struggle with AGR growth of just 6.1% QoQ. It has sequentially lost AGR market share only in five of 16 focus circles.
RJio’s AGR (incl. NLD) rose 28.1% YoY / 8.2% QoQ to Rs209bn. RJio’s AGR (incl. NLD) market share was 40.9%, up 30bps QoQ (YoY gain is higher due to low base on some one-offs). RJio’s growth has been lower in metros at 5.9% QoQ, while A / B / C’ circles AGR rose 9.6% / 7.8% / 8.5%, respectively. RJio may see more benefit of tariff hike (which we do not expect for Bharti / VIL) in Q1FY23 as it has higher portion of long validity customers, and slightly late effective tariff hike implementation. Thus, we will analyse the benefit on tariff hike flowing into revenue only at end-Q1FY23. Prima facie it looks like RJio had much better implementation of tariff hike in current round (vs in Q4FY20). In the interim, RJio has lost AGR market share in 12 circles as per Q4FY22 AGR analysis including few strong circles like Bihar, MP, WB and Assam.

Bharti’s AGR (incl. NLD) market share continues to rise