Telecom sector AGR for Q4FY20 up 10% vs Q3

The telecom sector recorded almost a 10% sequential growth in adjusted gross revenue (AGR) in the fiscal fourth quarter FY20, helped by the full impact of price hikes that the big telcos took last December that did not adversely hit mobile services consumption, data collated by the sector regulator showed.

The telecom industry’s AGR climbed 9.94% on-quarter to Rs 44,940 crore in the quarter ended March, FY20.

Overall sectoral minutes of consumption rose, with the all-India average minutes of usage (MoU) per subscriber per month from wireless services rising 5.34% sequentially to 750 in the quarter ended March.

Access services contributed 76.76% of total telecom services AGR in the fiscal fourth quarter.

“The strong sequential growth in telecom industry AGR in the March quarter was triggered a combination of the meaty tariff hikes taken last December, the charging of off-net voice calls by all operators and costlier minimum recharge plans,” Rajiv Sharma, research head at SBI Cap Securities said.

Last December, Bharti Airtel, Vodafone Idea and Reliance Jio had raised their bundled tariffs by around 14-33% for the first time after a three-year hiatus.

Reliance Jio Infocomm further consolidated its lead over the country’s two older incumbent carriers – Bharti Airtel and Vodafone Idea – on the AGR front although all three private telcos reported strong sequential upticks on this score in the fiscal fourth quarter. The telecom market leader’s decision last October to recover interconnect usage charges (IUC) for calls to rival networks further boosted its revenues in the March quarter.

Jio’s AGR, or revenue from licenced services, climbed 6.30% on-quarter to Rs 13,428.07 crore in the January-March period, while Bharti Airtel and Vodafone Idea also notched up 19.57% and 20.82% sequential growth in their March quarter AGRs to Rs 9,737 crore and Rs 7,866.60 crore respectively.

Telcos annually pay 8% of their AGR as licence fees and 3-5% towards SUC to the government. Consequently, the government’s licence fee and spectrum usage charge (SUC) collections also climbed on-quarter in the January-March period.

Licence fee mop-up for the government in the March quarter increased 10.21% sequentially to Rs 3,604 crore, while SUC takings rose strongly 13.40% on-quarter to Rs 1,424 crore, latest data put out by the Telecom Regulatory Authority of India (Trai) showed.

Trai’s report on the telecom industry’s March quarter performance also indicated that the monthly average revenue per user (ARPU) from wireless services rose 16.33% on-quarter to Rs 91.49 in the January-March period, helped by the first full beneficial impact of the tariff hikes. World Today