TRAI recently posted data on circlewise Gross Revenues & AGR for each telecom operator in India for the April-June'15 period. I collated data on 8 significant operators into my spreadsheets to do some analysis. The operators in sequence from largest to smallest in terms of Gross Revenues are: Airtel, Vodafone, Idea, BSNL/MTNL, Tata, RCom, Aircel & Uninor. The surprise here is that this sequence is not the same if arranged in terms of Subscriber base.
RCom & Aircel are No.4 & No.5 in terms of subscriber market share, but are at No.6 & 7 respectively in terms of Revenue market share. If we look at the corresponding numbers for Subscriber & Revenue market share % for each operator, the Top-3 show a common trend of having a larger Revenue market share number compared to Subscriber market share. This trend shows that these operators have high quality subscribers generating higher than Industry ARPUs. In case of BSNL/MTNL & Tata too, their ARPUs must be slightly more than the Industry averages. But look at the numbers for RCom, Aircel & Uninor. Their Revenue market shares are much lower than subscriber market shares, indicating that the quality of subscribers is much inferior. Amongst all these operators, Vodafone, Idea, Aircel & Uninor are pureplay mobile service providers, whereas BSNL/MTNL, Airtel, Tata & RCom also offer Wireline services with market shares of 74%, 13%, 6.5% and 4.5% respectively. Since Wireline subscribers normally generate higher ARPU than Wireless ones, this factor does help boost the operators Revenue market shares.
Circle-wise Revenues:
Airtel commands over 30% Revenue Market Share (RMS) across the country, which consists of 22 operating circles. But Airtel's RMS is in the region of 14% to 23% in 7 of those circles. The weakest circle for Airtel is Kerala, where it has only 14.4% RMS and is not even in the Top-3 operators. On the other hand the strongest circle for Airtel is Karnataka, where it commands a stupendous 47.5% RMS and it contributes 11.8% to Airtel's Total Revenues. Apart from Karnataka, there are 6 other circles where Airtel commands over 40% RMS. Also Airtel is No.1 operator in a total of 12 circles and is No.2 or 3 in 9 other circles.
Coming to Vodafone, it commands less than 23% RMS across India and is a distant 2nd. But Vodafone is No.1 in 6 circles (Gujarat, Haryana, Mumbai, Kolkata, UP-East & West Bengal) where it commands a total RMS of almost 33%. Vodafone is not in the Top-3 operators list in only 3 circles (HP, J&K and MP) where it commands just about 10% RMS. HP & J&K are in any case very very small circles with their total contribution less than 2% of Gross All-India Revenues for all operators put together. Vodafone is also strong in all the Metro circles. In Delhi, Mumbai, Kolkata and TN (including Chennai) circles, Vodafone commands a RMS of 28.6%, just behind Airtel's RMS figure of 29.2%.
Idea Cellular is a distant 3rd ranker currently with 18.2% All-India RMS, but is the fastest growing operator on a Y-o-Y comparison amongst the 8 operators I have considered. Idea held 16.4% RMS in June'14 quarter, i.e. it managed to improve it's RMS by 180 bps in just 1 year in such a competitive market. Despite being All-India No.3, Idea commands 1st position in 4 significant circles of Kerala, Maharashtra, MP & UP-West, where it holds a strong 35.2% RMS. In another 4 circles of AP, Gujarat, Haryana and Punjab, Idea commands RMS between 22 and 28% and is the No.2 operator here. Idea's RMS is in single digit (< 10%) in another 8 circles, which includes metro circles of Mumbai, Kolkata and TN. This is because Idea was a relatively late entrant in these circles.
There is a huge gap between the RMS of the Top-3 operators and the rest of the pack. BSNL/MTNL is currently the 4th largest operator with 8.7% RMS in June'15 quarter, about 180 bps less than what it held in June'14 quarter. With the recent steps taken by the NDA govt. to arrest decline in the PSU operator's landline business and to improve prospects of it's wireless business with improved 3G coverage and aggressive pricing, we could see BSNL/MTNL posting slower decline for a few quarters and then even post some growth later on. It's RMS is quite steady across circles with the weakest being in Bihar circle at 3.9% and strongest being in Kerala circle with 17.1%. Hopefully we will see this PSU behemoth survive in the coming years.
Next one is Tata Teleservices with 6.7% RMS across India, but it's absent from 3 circles of Noth-East, Assam and J&K. Karnataka circle is it's biggest contributor with 14% of it's Total All-India Revenues coming from this circle alone and it is also the No.3 operator here with 12.3% RMS, which is very very respectable considering the fact that Tata has been amongst the latest entrant in the GSM business amongst all the larger operators. It is interesting to note that most of the circles where it has posted healthy Y-o-Y growth in revenues are those where it holds 3G license. Apart from Karnataka, TTSL has posted healthy growth in circles of MP, Haryana, Mumbai, Orissa, Maharashtra & Kerala. 5 of these 7 circles are 3G circles. Strong growth in Mumbai circle was a surprise as Tata does not hold a 3G license here, but serves it's customers with CDMA-based Photon services and also has a strong Wireline business here. Amongst Tata's weakest circles are West Bengal, HP, Bihar & Rajasthan, where it has a RMS of between 1% and 3% only. Performance in Delhi circle if TTSL is also surprising as it does not have GSM or 3G business in this circle. Only CDMA and Wireline. But still it generates decent revenues and holds a respectable 5.5% RMS too.
Aircel is a largely regional player, but with All-India presence. The TN circle alone generates 30% of Aircel revenues, but even here it is the No.3 player. Aircel has 20+% RMS in circles of Assam, Noth-East and J&K and is a strong No.2 in these circles. In the last one year, Aircel has posted strong growth in circles of Bihar, Delhi and Mumbai, but on small numbers as it commands less than 6% RMS in these circles. Aircel has nearly shut down services in couple of circles like Haryana & MP and is probably depending on Roaming agreements alone. Going forward this will be a good idea for the smaller operators to focus on their circles of strength and depend on Roaming arrangements for the remaining circles. They can save considerable amount of resources by doing so & improve their profitability in the bargain.
RCom is a complete disappointment. It is neither strong in the circles where it has been operating a GSM business for 20 years, nor is it strong in the circles where it holds a 3G license. TTSL which is a younger and smaller operator than RCom, generates 20% higher Gross Revenues. RCom paid through the nose to buy 3G license in the two prime Metro circles of Mumbai & Delhi, but it commands a disappointing 8.6% and 7% RMS respectively here. RCom has been overambitious in making it's plans, but very poor in implementing them.
Uninor has done the smart thing by focusing on select circles and building a reasonable size of operations in them and then look at newer circles. Uninor commands a RMS of nearly 9% in UP-East & West circles, which is very very commendable. Even in Bihar & Gujarat it has over 6% RMS. All this by being the 'Sabse Sasta' operator. No 3G & 4G currently. It's strategy has worked well till now. But will be interesting to see it's progress in the coming quarters.
Circle-wise Revenues:
Airtel commands over 30% Revenue Market Share (RMS) across the country, which consists of 22 operating circles. But Airtel's RMS is in the region of 14% to 23% in 7 of those circles. The weakest circle for Airtel is Kerala, where it has only 14.4% RMS and is not even in the Top-3 operators. On the other hand the strongest circle for Airtel is Karnataka, where it commands a stupendous 47.5% RMS and it contributes 11.8% to Airtel's Total Revenues. Apart from Karnataka, there are 6 other circles where Airtel commands over 40% RMS. Also Airtel is No.1 operator in a total of 12 circles and is No.2 or 3 in 9 other circles.
Coming to Vodafone, it commands less than 23% RMS across India and is a distant 2nd. But Vodafone is No.1 in 6 circles (Gujarat, Haryana, Mumbai, Kolkata, UP-East & West Bengal) where it commands a total RMS of almost 33%. Vodafone is not in the Top-3 operators list in only 3 circles (HP, J&K and MP) where it commands just about 10% RMS. HP & J&K are in any case very very small circles with their total contribution less than 2% of Gross All-India Revenues for all operators put together. Vodafone is also strong in all the Metro circles. In Delhi, Mumbai, Kolkata and TN (including Chennai) circles, Vodafone commands a RMS of 28.6%, just behind Airtel's RMS figure of 29.2%.
Idea Cellular is a distant 3rd ranker currently with 18.2% All-India RMS, but is the fastest growing operator on a Y-o-Y comparison amongst the 8 operators I have considered. Idea held 16.4% RMS in June'14 quarter, i.e. it managed to improve it's RMS by 180 bps in just 1 year in such a competitive market. Despite being All-India No.3, Idea commands 1st position in 4 significant circles of Kerala, Maharashtra, MP & UP-West, where it holds a strong 35.2% RMS. In another 4 circles of AP, Gujarat, Haryana and Punjab, Idea commands RMS between 22 and 28% and is the No.2 operator here. Idea's RMS is in single digit (< 10%) in another 8 circles, which includes metro circles of Mumbai, Kolkata and TN. This is because Idea was a relatively late entrant in these circles.
There is a huge gap between the RMS of the Top-3 operators and the rest of the pack. BSNL/MTNL is currently the 4th largest operator with 8.7% RMS in June'15 quarter, about 180 bps less than what it held in June'14 quarter. With the recent steps taken by the NDA govt. to arrest decline in the PSU operator's landline business and to improve prospects of it's wireless business with improved 3G coverage and aggressive pricing, we could see BSNL/MTNL posting slower decline for a few quarters and then even post some growth later on. It's RMS is quite steady across circles with the weakest being in Bihar circle at 3.9% and strongest being in Kerala circle with 17.1%. Hopefully we will see this PSU behemoth survive in the coming years.
Next one is Tata Teleservices with 6.7% RMS across India, but it's absent from 3 circles of Noth-East, Assam and J&K. Karnataka circle is it's biggest contributor with 14% of it's Total All-India Revenues coming from this circle alone and it is also the No.3 operator here with 12.3% RMS, which is very very respectable considering the fact that Tata has been amongst the latest entrant in the GSM business amongst all the larger operators. It is interesting to note that most of the circles where it has posted healthy Y-o-Y growth in revenues are those where it holds 3G license. Apart from Karnataka, TTSL has posted healthy growth in circles of MP, Haryana, Mumbai, Orissa, Maharashtra & Kerala. 5 of these 7 circles are 3G circles. Strong growth in Mumbai circle was a surprise as Tata does not hold a 3G license here, but serves it's customers with CDMA-based Photon services and also has a strong Wireline business here. Amongst Tata's weakest circles are West Bengal, HP, Bihar & Rajasthan, where it has a RMS of between 1% and 3% only. Performance in Delhi circle if TTSL is also surprising as it does not have GSM or 3G business in this circle. Only CDMA and Wireline. But still it generates decent revenues and holds a respectable 5.5% RMS too.
Aircel is a largely regional player, but with All-India presence. The TN circle alone generates 30% of Aircel revenues, but even here it is the No.3 player. Aircel has 20+% RMS in circles of Assam, Noth-East and J&K and is a strong No.2 in these circles. In the last one year, Aircel has posted strong growth in circles of Bihar, Delhi and Mumbai, but on small numbers as it commands less than 6% RMS in these circles. Aircel has nearly shut down services in couple of circles like Haryana & MP and is probably depending on Roaming agreements alone. Going forward this will be a good idea for the smaller operators to focus on their circles of strength and depend on Roaming arrangements for the remaining circles. They can save considerable amount of resources by doing so & improve their profitability in the bargain.
RCom is a complete disappointment. It is neither strong in the circles where it has been operating a GSM business for 20 years, nor is it strong in the circles where it holds a 3G license. TTSL which is a younger and smaller operator than RCom, generates 20% higher Gross Revenues. RCom paid through the nose to buy 3G license in the two prime Metro circles of Mumbai & Delhi, but it commands a disappointing 8.6% and 7% RMS respectively here. RCom has been overambitious in making it's plans, but very poor in implementing them.
Uninor has done the smart thing by focusing on select circles and building a reasonable size of operations in them and then look at newer circles. Uninor commands a RMS of nearly 9% in UP-East & West circles, which is very very commendable. Even in Bihar & Gujarat it has over 6% RMS. All this by being the 'Sabse Sasta' operator. No 3G & 4G currently. It's strategy has worked well till now. But will be interesting to see it's progress in the coming quarters.
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