Mobile Network Quality & 3G Data Helping Incumbents

Airtel 3G NetworkAirtel’s overall voice market share is a better way to analyze the impact of smaller players’ lower tariff strategy on incumbents’ market share (given it is an incumbents across all the circles). The data shows that Airtel has managed to hold on to its share (~30%) despite smaller players’ pricing minutes at a discount (for example, Telenor’s voice RPM is 20% lower v/s Bharti/Idea, adjusting for their ILD/NLD/roaming revenue). Telenor has a 6.5% revenue share in its six circles and managed to gain ~170bps in the last nine quarters. Even Idea has gained ~220bps in 14 of its newer circles despite overall good execution. These 14 circles contribute 60% of the industry revenues and Idea currently has ~10% revenue share in them.

3G volume pick-up has helped incumbents’ (more…)

Mobile Industry Views on RPM Increasing + 3G Data + National Roaming

Mobile Industry in IndiaAll telcos expect RPM to inch up marginally in 1Q as everyone is curtailing free minutes/freebies, which is pushing the implied RPM up. Going forward, we expect competitive intensity to further decline as we expect some of the smaller telcos to further reduce their footprint and close operations in a few more circles. This would likely lead to continued MOU shift in favor of larger telcos, like Bharti, Idea, etc

3G Data growing slowly and steadily – Expect continued data increase (off low base) led by improving 3G coverage and increasing smartphone penetration. However, we do not expect any Indian telcos to show a hockey stick increase given limited capex investments and only 5 MHz spectrum per operator. Based on our meetings, we believe larger telcos are seeing a temporary slowdown in addition of new subs given the court order on (more…)

Idea Vs Airtel Vs Vodafone – 3G Coverage of RMS

3G spectrum auction in India led to a fragmented allocation across operators, with none of the operators winning pan-India. The incumbents (Bharti, Idea, Vodafone) were however, able to cover 65-75% of their revenue base. As a result of this fragmented allocation, these operators entered into intra-circle roaming arrangements with one another to provide a nation-wide 3G service using each others’ spectrum in circles where they didn’t win.

Idea appears best placed. Most of its important circles have been covered with 3G spectrum (74% of revenue). While it didn’t win the important Mumbai, Delhi circles, it should be noted that Idea is relatively a new operator in these circles, which is also reflected in its revenue market share. Late entry has resulted in relatively inferior quality subscribers who are less likely to use 3G services, at least in the medium term. This should moderate any impact from lack of high-speed data service in these circle. (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.