Telcos See Decline in Volume Growth in Q4 FY19, Growth of 4G Data Usage Per Subscriber Also Takes a Dip

The Telecom Regulatory Authority of India (Trai) recently published its performance indicator report signalling the growth in various parameters of the industry. The report highlights that while the consumer spends in the industry has finally stabilised after falling for several quarters, the volume growth has witnessed a sharp decline in the March quarter. The report, as noted by Mint, has also highlighted that the telecom companies are holding onto tariffs and maintaining revenues. The Trai report published on the matter indicated that Aggregate consumer spends on mobile services, including goods and services tax, was registered to be Rs 35,000 crore in the corresponding quarter. As per Kotak Institutional Equities, this translates to an annual spend of Rs 1.4 trillion, which is 5% higher than the figure of Rs 1.34 trillion, which was recorded in the quarter ending September 2018.

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Price Stabilisation Because of Minimum Recharge Plans

Also, it is worth noting that stabilisation in the revenue has come because of the stable pricing and the introduction of minimum recharge plans for the prepaid subscribers. Since February 2019, none of the major telecom operators have introduced any cut in the tariff prices, informed India Ratings and Research Pvt. Ltd. The revenue trends are also unlikely to change and diverge in the recently ended June quarter as compared to the quarter ending in March.

Both the top telecom operators, Bharti Airtel and Vodafone Idea are expected to report more stable revenue in the recent quarter in comparison to the quarter ending in March. In a preview note, an analyst at Kotak said, “Overall, our prognosis is that of a steady quarter with Bharti reporting a modest 1.6% sequential growth in wireless revenues and Vodafone Idea reporting a flattish revenue print, largely on the back of higher number of days in the June quarter versus March.” Even then, it is crucial to note that while the revenues have stabilised for the companies, the problems of the industry cannot be entirely forsaken.