Vodafone Idea cedes more ground to rivals, RMS dips to 22.6% in July-Sep: Trai data

The decline in loss-making Vi’s RMS was “led by a dip” in subscribers -- as many as 8 million customer losses in the September quarter, said Axis Capital. Subscriber fall continues to be a problem area for the loss-making telco, which lags its two...

Vodafone Idea (Vi) has lost further ground to rivals – Reliance Jio and Bharti Airtel – with its revenue market share (RMS) slipping 22 basis points (bps) sequentially to 22.6% in the September quarter, dragged mainly due to comparatively lower network-related spends which led to more subscriber losses, say analysts.

Conversely, market leader Jio reported 34 bps gains on-quarter, taking its RMS in the July-September period to 41.3%, while No 2 telco, Bharti Airtel’s was stable at around 34.2%, said sector experts, analysing latest telco financial data collated by the Telecom Regulatory Authority of India (Trai).

The decline in loss-making Vi’s RMS was “led by a dip” in subscribers -- as many as 8 million customer losses in the September quarter, said Axis Capital. Subscriber fall continues to be a problem area for the loss-making telco, which lags its two rivals on 4G coverage.


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Emkay Global expects the telco to suffer “further market erosion” in coming quarters due to its low investments in the network.

Cash-strapped Vi's Rs 1,040 crore capex in the September quarter, FY21 was well below Airtel's Rs 6,790 crore and Jio's Rs 5,426 crore. The telco is hoping to raise Rs25,000 crore in the next couple of months via a mix of debt and equity to invest in its 4G network and also clear its balance Rs 50,400 crore of AGR arrears to the government.

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Jio’s quarterly RMS gains were driven by a combination of strong sequential growth in revenue from national long distance (NLD) services, the residual impact of tariff hikes taken nearly a year back and 4G users up-trending to higher value data packs, say analysts.

“Jio’s NLD revenues recorded a strong rebound with a 64% sequential jump in the fiscal second quarter, after falling 53% in Q1,” said Emkay. The brokerage added that the market leader also “sustained its numero uno position in 18 circles,” with revenue contribution from its top-7 markets stable at 53%.

Airtel’s RMS was flattish but reported gains in key circles such as Bihar, Maharashtra and also retained its leadership in Karnataka and Tamil Nadu. Emkay estimates Airtel’s revenue from its top-7 circles stood at 59% in the July-September period.

Trai data showed that Jio, Airtel and Vi’s quarterly adjusted gross revenue (including NLD revenue) rose 5%, 4% and 3% sequentially to Rs 16,095 crore, Rs 13,306.1 crore and Rs 8,813 crore respectively.

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“Vi’s higher AGR (including NLD) in the September quarter was due to lower cash payments towards interconnect usage charges (IUC), post-changes in GST rules for payment of IUC invoice,” Axis Capital said.

Emkay said the telco posted sequential gains in key markets such as Kerala (+53%), Bihar (+ 26%) and Punjab (+20%), though UP-West (-13%) and Tamil Nadu (-6%) recorded sequential dips.

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Overall sectoral AGR (including NLD) rose 3.9% sequentially to Rs 38,962.4 crore, with Axis attributing this to the lagged impact of tariff hikes taken in December 2019, increased gross adds/recharges on easing of lockdown curbs and more 2G users upgrading to 4G.
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