A few days back, the Telecom Regulatory Authority of India (TRAI) had released its performance indicator report of the Indian Telecom industry for Q3 FY21. The report shed light on the performance of the telcos in key areas where it became pretty evident that Bharti Airtel had outperformed Reliance Jio and Vodafone Idea (Vi) during the quarter.
According to an ICICI Securities analysis of the TRAI's report, there were plenty of positives for the overall industry. Consumer spends on telecom services during Q3 FY21 grew Quarter-on-Quarter (QoQ) by 4.6% and Year-on-Year (YoY) by 20.9% to Rs 390 billion.
However, it was the prepaid services that majorly led to the growth of revenues for the industry, while the postpaid services saw an 8.1% YoY dip in revenues.
Telecom Industry’s ARPU Increased by 4% QoQ
The telecom industry’s average revenue per user (ARPU) grew by 4% QoQ and 22.1% YoY to Rs 113 (Rs 138 including GST) on the back of the tariff hikes implemented in December 2019. Postpaid services net revenues grew by 0.4% QoQ but fell by 8.1% YoY to Rs 37 billion during the quarter. At the same time, prepaid services net revenues grew by 6.2% QoQ and 34.1% YoY to Rs 314 billion.
The prepaid ARPU was up by 5.6% QoQ and 35.7% YoY to Rs 95, while the postpaid ARPU dipped by 3% QoQ and 13.4% YoY to Rs 227. The rise in prepaid ARPU was helped by the consumers shift from legacy networks to 4G services.
Bharti Airtel’s 4G Subscriber Base Improved
As per ICICI Securities, the 4G subscriber base grew 3.3% QoQ with a net addition of 22.4 million subscribers where Airtel’s subscriber market share increased by 110bps QoQ to 23.7% and Reliance Jio’s 4G subscribers market share dipped by 125bps QoQ to 58.4%.
Vodafone Idea’s (Vi) market subscriber share remained steady at 15.7%. The 3G subscribers nationwide declined at a fast rate and were down by 2.5 million QoQ to 26 million.
Bharti Airtel saw a 4.7% QoQ rise in data usage by subscribers, which was led by the growth in 4G subscribers during the quarter. The data usage volume by 2G and 3G subscribers dipped by 13.4% and 12.7 QoQ, respectively. Airtel’s data usage market share grew by 170bps QoQ (32%) while Vi’s dipped by 20bps QoQ (17%).
This wasn’t a very unexpected result from the Q3 FY21. It was quite predictable that Jio would be behind Airtel during the quarter, given the lowering rate of subscriber addition. A good thing from the results was the dipping number of legacy network users and the rising number of 4G subscribers.
