Airtel, Vodafone, Idea Consolidate at Top Position at the cost of CDMA Operators in 2013

GSM incumbents led by Airtel, Vodafone and Idea Cellular have regained the market share after seasonal weakness – in line with historical trends. On a structural basis CDMA / PSU operators have found it difficult to defend their market share despite 10-11% industry growth. Healthy execution and strong brand positioning, we believe, would drive market share gains for top 3 operators (Airtel, Vodafone and Idea). We believe Idea Cellular – as a pure-play wireless operator – will be the biggest

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Tariff increase – what is different compared to increases in mid-2011?

Indian Mobile operators raised tariffs in June 2011 which led to an increase in RPM in subsequent quarters. However a tariff war and RPM pressure returned and tariff hikes were not sustained. Many Investors questioned us on how the recent industry actions of lower discounting and raising RPM compared to 2011.

Not only had industry financials deteriorated from 2011, there is the pressure of significant regulatory costs faced by all operators. Industry over capacity is getting addressed as new entrants as well as existing operators (like Tata and Aircel) are shutting cell sites/circles selectively.

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Airtel Leads Revenue Market Share in 2012

Telecom regulator TRAI released operator wise gross revenue data for 3Q FY13. Revenue market share for incumbent operators (including Bharti, Idea and Vodafone) increased to 67.7% in 3Q FY13 from 66.9% in 2Q FY13. Bharti and Idea gained ~50bps and ~20bps market share QoQ. RMS for Vodafone remained almost flat whereas other operators like Rcom, … Read more