Airtel Biggest Beneficiary of Lower Spectrum Usage Charges

Airtel IndiaCurrently in India, the current spectrum usage charges (SUC) is escalation based on spectrum holdings. On average, operators pay SUCs in the range of 3.6% to 5.6% of adjusted gross revenue (AGR). We believe that lower SUCs (if implemented) will partly offset the spectrum renewal charges to be paid by the operators at the time of licence renewals. Airtel pays the highest SUCs in the industry and would be the biggest beneficiary of a lower SUC regime. In a scenario of a flat 3% SUC (as recommended by the TRAI), Airtel’s potential NPV benefit is Rs20/sh (vs. Rs39/sh for spectrum renewal charges). However, if a flat SUC is pegged at 5%, then the potential benefits for Bharti and Idea will be reduced to Rs5/sh and Rs1/sh, respectively.

Despite significant Reserve Price cut (more…)

Airtel Advantage 199 Plan Tariff Hiked

Airtel Mobile is increasing voice tariffs for post-paid customers under one of its per-minute billing plans, Advantage 199, with effect from 8 Sep. This is in-line with our thesis of expected ARPM increases going forward.

Adhering to TRAI guidelines, Bharti Airtel has informed its customers that it will raise tariffs on the Advantage-199 plan. Under this plan, per-minute on-net local and STD rates will be raised to 60 paise from the current 50 paise. Rates for calls to (more…)

Airtel Pre-Paid Mobile Tariff Benefits Reduced in May-2013 – Tracking Changes

Airtel IndiaBharti Airtel India’s Largest Wireless Carrier has a Big Data Analytics Team Closely Working with its Product Managers in Delhi who decide how to modify the Pre-Paid Plans across 22 Cicles in India. We tracked Airtel closely in the last 1 month and here are the key changes they brought across circles reducing benefits on Pre-Paid Special tariff Plans / Vouchers and boosting bottom-line of the company. The following table shows the same (more…)

Airtel Mobile Tariff Hike in April Across All Circles

Airtel IndiaIndia’s leading Cellular Service Provider, Bharti Airtel lead the Hike in 2G Voice Tariff Upwards without losing traction in the market or letting subscribers off their platform. Here is an excerpt of Old Tariff vs New Tariff that were hiked in April 2013. (more…)

Airtel’s Aggressive India Helps Gain Revenue Market Share

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.

Airtel’s Voice Tariff Hikes in Feb-2013

The following Chart Shows Airtel’s Tariff Hikes in the month of Feb-2013 across all Indian Circles. The Hike could be in STD pack, STV or Minutes Pack. The impact of these hikes on the profitability of Airtel is as shown below in the chart.

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