Telecom sector witnesses 16% revenue surge in Q2; Bharti Airtel tops the list

The adjusted gross revenue for telecom industry grew 16.4% on-year to ₹54,300 crore with Bharti Airtel gaining 83bps sequentially taking its share to 36.3% while adding more incremental versus Reliance Jio even though Jio had stronger subscriber addition for the quarter ended September.

“The benefit of premiumisation has been limited while subscriber growth has returned post SIM consolidation. The Q2FY23 annualised revenue stood at ₹2.17 trillion and AGR was ₹1.9 trillion for FY22. Industry gross revenue was up 3.1% on-quarter and 21% on-year to ₹61,600 crore,” ICICI Securities said in a note on Friday.

According to analysts at the firm Airtel has grown faster in metros and A circles versus Reliance Jio on higher post-paid subscriber addition, and better monetisation of data usage, however, Vodafone Idea’s AGR market share fell 20bps to 17.5% on underperformance in leadership circles.

Airtel’s AGR increased 4.0 on-quarter or 17.7% on-year to ₹19,700 crore, rising 41bps on-year, with its incremental AGR on-quarter at ₹760 crore versus ₹660 crore for Reliance Jio. The circle-wise analysis shows Airtel grew significantly faster in metros at 10% on-quarter and 5.7% in A circles, even as B and C circles have grown slower at 2.6% and 2% on-quarter, respectively.

ICICI Securities pointed to UP East, UP West, Bihar and MP circles that under-performed. It highlighted that Airtel’s gross revenue-based market share of 38% was equal to Jio’s even when there’s a gap of 510bps between their AGR market shares, in favour of Jio.

Vodafone Idea’s AGR-based market share fell to 17.5% down 20bps on-quarter but increased 9.7% on-year to ₹9,500 crore. “Growth in leadership circles was slower at 0.9% on-quarter due to dip in on-quarter revenue in UP east (down 11.2%), MP (down 3.6%) and Maharashtra (down 0.6%),” analysts at the firm said. Growth in established circles was relatively faster at 3.2% on-quarter while that in others increased by 2.9%, analysts added.

In comparison, Jio’s AGR rose 3% on-quarter or 20.1% on-year to ₹22,500 crore leading to market share of 41.4%, up 56bps on-quarter.

“AGR growth has been relatively higher in metros at 3.3% On-quarter and A’ circles at 4.4% On-quarter; however, they have grown significantly slower compared to Bharti in the same circles. B and C circles AGR rose at 2.3% and 2.6%, respectively,” analysts said.

In circle-wise analysis, RJio lost market share in eight circles and under-performed in a few circles, namely Delhi, Tamil Nadu, Rajasthan and MP. It also showed significant pick-up in AGR in Karnataka circle, which has been a stronghold of Airtel, up 10.4% on-quarter and 36.9% on-year.

RJio’s market share based on gross revenue has been close to 38% for past five quarters, while Bharti has gained under the same parameter.