What Reliance Jio And Bharti Airtel’s Core Revenue Reveals

Reliance Jio Infocomm Ltd.’s growth slowed sharply in the fourth quarter even as it continued to add users.

The Mukesh Ambani-led telecom operator’s adjusted gross revenue rose 3.8 sequentially in the three months ended March, according to data put by the Telecom Regulatory Authority of India. That compares with an average growth of 15 percent in the last four quarters.

It came despite the addition of 2.7 crore new subscribers. What that means is that Reliance Jio earned less from new users.

It’s the first time since Reliance Jio started charging when its adjusted gross revenue—that strips out interconnect fees and other deductions—grew at a slower pace than its revenue, which rose 7 percent during the quarter.

This could be because of higher non-core revenue from interconnect usage charge or international long-distance calls. Emailed queries to Reliance Jio seeking clarity remained unanswered.

Airtel Too

Sunil Mittal-controlled Bharti Airtel Ltd., which reported its fastest revenue growth in last three years, also witnessed a decline in adjusted gross revenue.

India mobile business revenue grew 4 percent over the previous quarter while its adjusted gross revenue declined 8 percent. An email to Bharti Airtel remained unanswered.

This decline could largely be on account of write-down of bad debts arising from inter-connect usage revenue from telecom operators who shut down their operations and post-paid receivables in the last three-four years, said two analysts from the telecom industry aware of the development. They didn’t want to be identified as they are not allowed to speak to the media.

Airtel’s adjusted gross revenue fell in a few of its key metro circles, including Delhi and Mumbai where it declined 47 percent and 33 percent, respectively, over the previous quarter. The two circles together contribute 9 percent to its domestic adjusted revenue. For Jammu and Kashmir, the adjusted revenue turned negative.

The telecom industry saw its adjusted gross revenue grow for the second quarter in a row, largely on account of state-owned BSNL and Reliance Jio’s growth.

Reliance Jio’s revenue market share increased for the sixth straight quarter, albeit at a slower rate. Bharti Airtel’s shares dropped the most, while Vodafone Idea Ltd. stemmed the pace of decline to the lowest level in four quarters.

Revenue market share factors in the adjusted gross revenue and national long-distance revenue.―Bloomberg Quint