Airtel Might Bounce Back to Top Position in Revenue Share After Tata Tele Acquisition

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Bharti Airtel is no more the leading telecom operator in India both in terms of subscriber market share and revenue market share (RMS). The crown, which is now held by the newly formed Vodafone Idea Limited (VIL) will likely be taken away by Bharti Airtel in the next two-three quarters, albeit only in terms of Revenue Market Share. Airtel is inching towards the closure of Tata Teleservices acquisition which will boost the telco' subscriber base and revenue share in some circles. Airtel' subscriber base might go past 370 million, but it will still be lower than VIL's 408 million user base. Having said that, the newly merged entity of Vodafone and Idea Cellular, according to analysts will lose the ground as they'll be busy in the integration process.


Airtel to Regain its Top Position in Revenue Share

According to Rohan Dhamija, partner & head of India & Middle East, Analysys Mason, said there's practical evidence that when two large telcos merge in a market, the “combined entity loses about 200 basis points of RMS” during post-closure, network integration. But in the case of Vodafone Idea Limited, the loss will be even bigger, according to the analyst.

According to the Telecom Merger and Acquisition rules, the combined RMS of a merged entity and subscriber market share should not be over 50% in any circle. And Vodafone Idea Limited have to comply with these M&A rules. VIL breaches 50% RMS cap in four telecom circles- Maharashtra, Kerala, Gujarat and Haryana.

At the moment, the Indian telecom market is super competitive, all credit goes to Reliance Jio here. And it will remain competitive as other leading telcos Airtel and Jio are investing heavily on 4G infrastructure, and their focus is entirely on adding new subscribers. At the same time, VIL will be busy with networks integration.

Airtel and Jio are focussing “much more on 4G capex and likely to focus on smartphone user additions over the next six months during which VIL will be busy with networks integration,” Rohan Dhamija added, according to Economic Times.

Other analysts also raised their voice regarding the name. Nitin Soni, Director at Global Ratings Firm, Fitch, said that Airtel would easily get into the RMS leadership position, once it completes the acquisition of Tata Teleservices. “Airtel could easily claw back RMS leadership from Vodafone Idea once it concludes the Tata Tele’s mobility business integration,” Soni said.

Bharti Airtel is Currently the Second Larges in Revenue Share

For the unaware, Bharti Airtel lost its top spot to Vodafone Idea Limited a week ago as VIL started its operations. When the merger of Vodafone India and Idea Cellular announced way back in March 2017, the RMS of the combined entity was just over 40%. However, VIL started its operations with 33% of share and Airtel is marginally below with 31% RMS. Reliance Jio, on the other hand, is third on the list with 22% share in revenue.

Airtel's Revenue Market Share got a boost after its successful acquisition of Telenor India during Q1 FY19. And the Sunil Mittal-led telco now waiting for the approval from National Company Law Tribunal’s (NCLT) for its deal with Tata Tele Services. Once Airtel receives the nod from NCLT, it will approach the Department of Telecommunications (DoT) for the final approval, post which it will transfer all the Tata Tele subscribers to its portfolio.

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Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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