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 (more…)

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. (more…)

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, Tata Tele and Aircel lost 10-20bps market share each.

Revenue market share (RMS) for Airtel stood at 30.4% in 3Q FY13. Adjusted for one time revenue gain in previous quarter for Airtel, RMS increased by 50bps QoQ. Increase in revenue market share was on the back of over 100bps QoQ increase in Category B&C circles. Notably, in last two years, Airtel has been under pressure due to aggressive pricing and marketing by other operators including (Idea and Vodafone). However, Bharti airtel managed to regain some lost ground in 9M FY13 (30.4% in 3Q FY13 vs 29.2% in 4Q FY12) on the back of tactical change in tariff strategy.

RMS for Idea stood at 14.8% at the end of 3Q FY13 and grew by 20bps QoQ. Increase in RMS is attributed to ~30bps increase in category A&B circles partially offset by flat RMS in Metros and category C circles. On the back of aggressive marketing and tariff strategy and expanding presence in emerging circles, Idea has managed to increase its RMS by 120bps in last two years

RMS for Vodafone remained flat QoQ at 22.5%. This was driven by increase in Metro and category A cirles offset by decline in category B&C circles. Other operators like Rcom, Tata Tele, Aircel and Telewings lost 10-20bps each in 3Q FY13.