In a visible sign of a turnaround in the India telecom sector, the industry’s revenue grew 10.1 per cent in financial year 2014, compared with an 8.6 per cent growth in the previous year.
The top three operators garnered a combined revenue market share (RMS) of 70.4 per cent in the fourth quarter of the fiscal.
Bharti Airtel, the country’s leading operator by revenue and subscribers, had a 30.5 per cent RMS, followed by Vodafone India with a 23.4 per cent RMS, an analysis of Telecom Regulatory Authority of India (TRAI) data revealed.
While Bharti recorded a 50 basis points year-on-year growth and Vodafone India a 40 basis points growth, Idea Cellular topped the charts with a 90 basis points rise.
The top three companies – Bharti Airtel (35 per cent), Vodafone India (28 per cent) and Idea Cellular 28 (per cent) - accounted for 91 per cent of incremental industry revenue in FY14. Idea Cellular gained the most RMS in FY14, following the trend of the previous financial year. Of the smaller operators, Uninor gained RMS at the cost of other small operators, according to a report by BNP Paribas Securities India, which analysed the data said.
“Over the last year, the big three operators have gained RMS in most of the 22 circles (Idea in 19, Bharti in 16 and Vodafone India in 15), while Tata, BSNL and Reliance Communications lost in 21, 18 and 18 circles, respectively,” the financial services firm said.
The bunched up spectrum payouts over FY14-15 will likely weigh on the profitability of Bharti and Idea, it added.
Return of pricing power The Indian telecom industry is seeing a return of pricing power and consolidation.
EBITDA margins are improving and data growth is picking up, BNP Paribas said.
Despite improvement in the financials of the top three operators, the industry as a whole continues to bleed, with most operators seeing losses and having high debt.