Airtel’s aggressive India mobile strategy, started in Apr-2012, is bearing fruit.
On the one hand, the company has managed to bring about discipline in the industry on tariffs and costs, while on the other it has managed to reap rich market share dividends (60% share of incremental industry revenues in the first nine months of the new strategy being put in place).
If you recall, in Jun-12 earnings call (the then India CEO Mr Sanjay Kapoor had noted:
If there was a choice to be made in the short run we would make the choice in favour of revenue market share over margins.
Airtel’s aggressiveness on tariff from Apr-May 2012 seems to have met with the intended ‘signalling’ objective and smaller competitors have been more receptive of the idea of a tariff hike since then. Airtel regained market share and accounted for 60% of the incremental market share from Mar-12 to Dec-12 (the first nine months of its aggressive strategy). Its RMS increased 1.2% during the period versus 0.2% decline for both Idea and Vodafone. Airtel now has a RMS of 30.5% on all India basis.