Telecom - Market Share TRACKER - Bharti is narrowing the gap on incremental market share vs RJio - ICICI Securities

Industry AGR (including NLD) grew 26.8% YoY / 3.6% QoQ to Rs413bn while GR was up 20.2% YoY / 3.2% QoQ to Rs499bn. Bharti Airtel's (Bharti) AGR growth (3.8% QoQ) came in lower than its quarterly filing (+7.4% QoQ) probably due to change in provisioning. Its AGR (including NLD) market share rose only 4bps to 32.2%. However, on YoY basis, Bharti's incremental AGR market share was at 36% and its gap vs RJio is narrowing. VIL's AGR (including NLD) fell 2.9% YoY despite tariff hikes, which is disappointing, and its new normal AGR (including NLD) market share stood at only 21.3%. RJio's AGR (including NLD) grew 4.7% QoQ / 38% YoY and its market share rose 40bps QoQ to 39%. RJio's ISP revenue fell 23% QoQ to Rs0.4bn.

- Industry AGR (including NLD) rose 26.8% YoY / 3.6% QoQ to Rs413bn. This benefited from the tariff hikes taken Dec'19. We see Bharti's AGR grew 30.8% YoY to Rs133bn, which is faster than expected due to higher 4G net add. VIL has seen AGR decline of 2.9% despite tariff hikes due to subscriber loss. RJio's growth decelerated to 38% YoY though it had the highest benefit of tariff hikes. Industry GR grew at 20.2% YoY and 3.2% QoQ to Rs499bn.

- Bharti's AGR (including NLD) grew 30.8% YoY / 3.8% QoQ to Rs133bn. Growth on QoQ basis was lower than the company's quarterly filing (+7.4% QoQ) probably on change in provisioning (GR rose 4.9% QoQ). Company's AGR (including NLD) market share stood at 32.2%, up 4bps QoQ. Its incremental AGR was Rs31.4bn and incremental AGR market share was 36%. Bharti's slower growth vs RJio can be attributed to deceleration in growth in Bharti's leadership circles of A.P. (2.2% QoQ circle's industry AGR growth), Karnataka (+2.9%), T.N. (-1.6%) and Rajasthan (+0.8%). These four circles contribute 37% to Bharti's AGR and 29% to industry's. On YoY basis, Bharti lost market share in only two circles (Delhi and Kolkata); thus its strong performance can be attributed across circles.

- VIL's AGR (incl NLD) market share at just 21.3%. VIL's AGR (incl NLD) dipped 2.9% YoY and grew 2.8% QoQ (on low base of last quarter due to provisioning) to Rs88. GR was down 2.3% YoY / up 2.3% QoQ to Rs120bn. It is disappointing to see that VIL's revenue declined YoY despite tariff hikes, which shows underlying weakness in operations. VIL saw good growth in B' circles (+18% YoY) while the worst hurt are the metros (-27% YoY) and A' circles (AGR down 2.1% YoY). Notably, VIL has lowest GR to AGR conversion despite higher net IUC revenue is surprising.

- RJio's AGR (including NLD) rose 38% YoY / 4.7% QoQ to Rs161bn; GR grew at 28.5% YoY / 5.1% QoQ to Rs189bn. Its AGR (including NLD) market share was 39%, up 40bps QoQ. RJio's B' and C' circles saw significant deceleration in revenue growth to 3.1% and 3.5% QoQ respectively on bounce-back of VIL and maturing market share at over 50%. Metros and A' circles continued their strong growth at 5.6% and 5.8% QoQ respectively. Despite the strong growth, RJio lost AGR market share (YoY basis) in nine circles, all in category B' and C' circles.

Source : Equity Bulls

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