Reliance Jio Gains At Bharti Airtel’s Expense
India’s biggest telecom operator saw its biggest ever decline in revenue market share.
Bharti Airtel Ltd.’s revenue share in India’s telecom market fell the most in the three months ended September. And Mukesh Ambani’s Reliance Jio Infocomm Ltd. gained at the expense of India’s biggest telecom operator.
Reliance Jio’s share stood at nearly 14 percent in the second quarter of the financial year 2017-18. In comparison, Bharti Airtel Ltd.’s revenue share declined 475 basis points to below 30 percent for the first time in at least 15 quarters. Vodafone India Ltd. and Idea Cellular Ltd. also saw a sharp sequential fall in their gross revenue after adjusting for interconnect usage charges and other deductions.
Among the smaller players, Aircel’s revenue market share fell the most followed by Tata Teleservices Ltd. Anil Ambani-led Reliance Communications Ltd., which recently defaulted on its dollar debt, managed to increase its share by 16 basis points.
Government-owned BSNL and MTNL’s combined share also declined by 65 basis points to 5.3 percent.
Led by Reliance Jio, the adjusted gross revenue of the telecom sector rose 4 percent—the most in the last 10 quarters—to Rs 30,755 crore after four straight quarters of decline.
Going forward, ICICI Securities expects Reliance Jio’s revenue market share to improve further.
Expect rejig in AGR market share for incumbents during the third quarter due to the cut in interconnect charges, which should benefit Relaince Jio and negatively impact the top three.ICICI Securities Report
Vodafone India and Idea Cellular will have lower revenue loss post-merger as their present revenue market share exceeds 50 percent limit in only three circles as compared to earlier eight circles.
The combined entity will have to bring down its revenue market share in Maharashtra, Gujarat and Kerala below 50 percent within 12 months of merger to comply with M&A regulations.