Vodafone, Idea user? This big change set to hit you soon
According to an Emkay report, adjusted Gross Revenue (including NLD revenue) for the industry declined by 7.3% qoq (15.2% yoy) to Rs 318 billion for Q4FY18.
Telecom sector continued to witness disappointing quarter even at the end of fiscal FY18, with incumbent operators like Bharti Airtel, Idea Cellular and Vodafone recording declines in revenue due to Mukesh Ambani-led Reliance Jio's offers of heavy data, unlimited calls and cheap recharge packs. According to an Emkay report, adjusted Gross Revenue (including NLD revenue) for the industry declined by 7.3% qoq (15.2% yoy) to Rs 318 billion for Q4FY18. In FY18 industry revenue declined by 16%, with the top 3 operators losing 21% (on combined revenues). Such outcome was due to RJio as per the report, who managed to gain revenue market share (RMS) of 19.8% for Q4FY18 and 11.4% for FY18.
Naval Seth, Research Analysts at Emkay said, “Competition from JIO is expected to continue, as the race for subscribers and revenue market share is not going to end soon. Revenue for the incumbents would continue to remain under pressure amid renewed pricing aggression by JIO in the post-paid segment.”
Seth added, “In our view, Idea and Vodafone are more vulnerable to market share loss to JIO during their merger transition.”
So, the chances of Vodafone, Idea users being affected by the change in the situation is high and they may well vote for change.
Here’s how top five telecom operators performed during Q4FY18, as per Emkay report.
AGR increased by 15% qoq to Rs 62 billion as against Rs 54 billion. RMS expanded by 582 basis points qoq to 25.5% versus 19.7% in Q3FY18.
Gross revenue stood at Rs 80 billion in Q4FY18 compared to Rs 74 billion in Q3FY18, up 8.2% qoq.
JIO is number 1 operator in 5 circles and No. 2 in 13 circles; these circles account for 13% and 62% of industry revenue, respectively.
AGR from the top 7 circles grew by 16% yoy and contributed 47% to total revenue.
AGR declined by 7.5% qoq (31.6% yoy) to Rs 71 billion with RMS of 29.1% (+117bps qoq and -442bps yoy).
Revenue from the top 7 circles declined by 8% qoq and contributed 63% to total revenue. Airtel reported drop in revenue in 17 circles.
Revenue declined by 15% qoq (37% yoy) to Rs 40.3 billion with RMS of 16.6% (-75bps qoq and -414bps yoy).
All the circles (except NE and Odisha) registered a sequential decline. Top 7 circles (contributing 73% to AGR) registered a decline of 14% qoq (34% yoy).
AGR declined by 9.9% qoq (29.8% yoy) to Rs 51 billion with RMS of 20.9% (+30bps qoq and -255bps yoy). Revenue declined in 17 out of 22 circles.
Notable increase was seen in Haryana where AGR was up 100% while GR was up only 13%. AGR for the top 7 circles (contributing 57% to total revenue) declined by 16% qoq (34% yoy).
BSNL recorded 36% qoq increase in revenue with RMS of 5.1% (+179bps qoq). MTNL reported 11% qoq increase in revenue, driven by a meaningful increase in revenue from the Delhi circle.
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