Bharti Airtel and Reliance Jio have again posted positive growth in their revenue market share. Talking about the telecom industry's adjusted gross revenue (AGR), there was a reported growth of 1.4% QoQ in Q3 FY23 and 9.1% YoY to Rs 560 billion. According to an ICICI Securities report, Airtel's AGR market share was 36.5%, up 57 basis points YoY. Airtel saw its AGR growing by Rs 20 billion YoY. At the same time, Reliance Jio saw its AGR going up by Rs 24 billion YoY. Jio's AGR market share was 41.7%.
According to an ICICI Securities report, Reliance Jio and Bharti Airtel saw their growth happening at a faster rate in Category B & C circles during the last quarter of FY23. In the metro circles, the report added that the growth for Jio and Airtel was flattish. As for Vodafone Idea, ICICI Securities said that its AGR market share fell by 40 basis points QoQ to 16.6%. This was because of underperformance in leadership circles. For FY23, industry AGR (including NLD) grew 15.1% YoY to Rs 2,188 billion.
Tariff Hike Could be Delayed to 2024
Kotak Institutional Securities, in a report, said that the tariff hikes for the telecom sector can be delayed until 2024. This is because of the upcoming general elections. This would definitely affect the potential of the telcos to increase revenues and improve profit margins amidst heavy 5G rollout.
Kotak Institutional Securities said, "Industry revenue growth slowed to 9% YoY (versus 15% YoY in Q3 FY23) to Rs 569 billion (1.3% QoQ) in March 2023, with benefits of the December 2021 tariff hike already in the base and continued muted industry net adds."
Even without any tariff hikes, Airtel and Jio saw their revenue market share inching upwards. Vodafone Idea (Vi) is the only private telecom operator at a loss here.
"Delayed tariff hikes, while negative for the sector, would hurt Vi’s survival hopes the most (faces ~Rs55 bn cash shortfall in FY2024) and could lead to accelerated market share gains for Bharti and RJio at Vi’s expense, in our view," said Kotak Institutional Securities.