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Telecom sector revenues rises 33% from lows; Reliance Jio leads with 38% revenue share
As the country-wide lockdowns continued to ease in the September quarter, the revenues of the telecom sector during the quarter increased by 26 percent on-year and 5 percent on-quarter. These were up 33 percent from the lows of the fourth quarter of FY19.
Bharti Airtel reported 4 percent QoQ revenue growth, while growth for Reliance Jio was highest at 5 percent QoQ also with delayed flow-through of prepaid tariff hikes of December 2019. Vodafone Idea which was most impacted by the COVID-19-led lockdowns lagged peers with a lower 3 percent QoQ revenue growth, as per Telecom Regulatory Authority of India (TRAI) data.
In Q2FY21, top-three operators accounted for 91 percent of sector revenues, with Reliance Jio leading the industry with 38 percent revenue share. Reliance Jio’s Q2FY21 revenue share was unchanged QoQ, but up 3 percent YoY, while Bharti Airtel’s share at 32 percent was although down by 40 bps QoQ but up 1 percent YoY.
However, Vodafone Idea continued to lose the revenue market share in the September quarter with it losing 40 bps QoQ/6 ppt YoY to 20.9 percent. The telco has lost 22 ppt revenue market share from the peak.
According to a report by CLSA, metro cities, which were most impacted by COVID-19-led lockdown in previous quarters, have seen the highest revenue growth, up 11 percent QoQ in Q2FY21.
“Growth in Metros has been led by Vodafone Idea which saw a 22 percent QoQ growth; however it reported a 3 percent QoQ decline in A-circles which accounts for 44 percent of its revenues,” CLSA report said.
In Q2FY21, Bharti Airtel witnessed 3-5 percent QoQ growth across all markets and Reliance Jio too witnessed a 4-6 percent QoQ growth across markets and maintained 38 percent market share.
Over the last 12 months, Vodafone Idea has lost 6ppt market share (40 bps in Q2FY21) and in 21 of 22 circles pan-India. Also, it is worst affected by AGR judgment, the brokerage said.
CLSA remains positive on Reliance Jio and sees Bharti Airtel as well placed to play the sector’s growth with 4G penetration at 52 percent of its total mobile subscribers and ARPU 12-24 percent ahead of peers. CNBCTV18
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