As we all know that Idea Cellular's business is purely it's India Mobile business, but in case of Bharti Airtel, it's business includes not just it's Mobile business in 18 countries, but also smaller India businesses like Digital TV, Home Broadband, Enterprise Solutions, etc. For Bharti Airtel, it's India Mobile business contributes nearly two-thirds of it's Consolidated Revenues and possibly a higher proportion of it's Profits. Hence the good or bad performance of it's India Mobile business does have a substantial impact on the company's overall numbers.
For my analysis, I have divided the Total Revenues (India Mobile business only) of the two companies into two parts: Data Revenues & Non-Data Revenues. The latter part will comprise about 95% of Voice business & rest from VAS like SMS, Ringtones, etc. Let's first check out the
Quarterly progress of the Non-Data Revenues. Both the companies have seen their Quarterly Non-Data Revenues hover within a range over the last 10 quarters. Idea Cellular has performed slightly better than Bharti Airtel. Idea's Sept'16 number of Rs.7420 crores is nearly 14% higher than it's Sept'14 number of Rs.6525 crores and nearly 5% higher than it's Sept'15 number of Rs.7035 crores. On the other hand, Bharti Airtel's Sept'16 number of Rs.11,158 crores is only 3% higher than it's Sept'14 number of Rs.10829 crores and nearly 3.6% higher than it's Sept'15 number of Rs.10762 crores. In Sept'14, Idea Cellular's Non-Data Revenues were about 60.3% of Bharti Airtel's corresponding number. But the same has now improved to 66.5% in Sept'16. Idea Cellular has clearly outperformed Bharti Airtel on the Voice business front over the last 2 years. Both the companies have also reported a small Q-o-Q dip in Sept'16, with Bharti Airtel's number dropping 3.2% and Idea Cellular's number dropping 2.2%. In case of Bharti Airtel, the Non-Data portion forms 75.7% of it's India Mobile business revenues, while the same for Idea Cellular forms 78.7%.
2-3 years, is clearly showing signs of coming to a screeching halt in Sept'16. I had mentioned this in my previous post on this topic. Have a look at the chart alongside. The sudden collapse of incremental growth rate was expected due to availability of Reliance Jio's Preview Offer since June-July16 and then the Welcome Offer launch on 5th September, when 4G Smartphone owners started scrambling for a Jio simcard. Let us try & check which one of the these two have done better so far. Bharti Airtel's Sept'16 Data Revenue of Rs.3577 crores is 98% higher than Sept'14 number and 23.6% higher than Sept'15 number, but only 1.4% higher Q-o-Q. On the other hand, Idea Cellular's Sept'16 Data Revenue of Rs.2009 crores is 92% higher than Sept'14 number and 19.2% higher than Sept'15 number, but only 2.2% higher Q-o-Q. Bharti Airtel has noticeably posted a little better growth in 2-years or 1-year comparison, but Idea Cellular has posted marginally better Q-o-Q growth number.
Bharti Airtel has a much wider 3G as well as 4G spectrum footprint when compared to Idea Cellular. Hence Airtel is expected to post much better Data Revenue/Volume growth. But it seems like either Airtel is not able to properly utilise it's spectrum advantage or Idea is doing much better even with 3G/4G coverage is limited circles. Let us look at how the Data Volume growth is panning out for the two operators.
Both operators have seen a stupendous surge in Data Volumes over the last many quarters. Bharti Airtel's Sept'16 Data Volume of 178.1 million GBs is 163% higher than Sept'14 number, 54.9% higher than Sept'15 number and 12.7% higher Q-o-Q. At the same time, Idea Cellular's Sept'16 Data Volume of 107.4 million GBs is 173% higher than Sept'14 number, 49.2% higher than Sept'15 number and 15.4% higher Q-o-Q. That means Idea Cellular has managed to outperform Bharti Airtel in Q-o-Q as well as 2-years comparison, but lagged only in the 1-year comparison. I find this to be a big achievement for Idea Cellular as it has a clear disadvantage when it comes to 3G/4G spectrum footprint. Bharti Airtel has been offering 3G in 21 circles on it's own spectrum, while Idea Cellular does the same in only 13 circles. Even on 4G front, Bharti Airtel has been offering the services in 15 or 16 circles for more than a year now, while Idea Cellular started rolling out it's 4G services only in December'15, that too limited to about 9 or 10 circles. Despite this spectrum holdings advantage, Bharti Airtel has not been able to report superior performance on the Wireless Data business front. At this point, I would rate Idea Cellular's overall performance to be superior to Bharti Airtel's.
Despite it's spectrum disadvantage, Idea Cellular has been very aggressive on the rollout of 3G/4G services in it's circles of strength. I had mentioned this in an earlier post on Idea Cellular in June'16. The observations that I had shared in that post are certainly the reasons behind Idea's strong performance despite spectrum disadvantage. During the recently concluded Spectrum Auctions, Idea Cellular has not just managed to strengthen it's spectrum position in the circles of importance, but also increased it's 3G/4G reach into newer circles. If Idea Cellular does manage to replicate it's success in it's strong circles (even to a small extent) in the newer circles, Bharti Airtel will have more reasons to worry. And we cannot forget Reliance Jio and Vodafone. Bharti Airtel clearly needs to buckle up and prepare for more aggressive network rollout and use it's spectrum advantage to the maximum. It has clearly failed to do so until now.
For my analysis, I have divided the Total Revenues (India Mobile business only) of the two companies into two parts: Data Revenues & Non-Data Revenues. The latter part will comprise about 95% of Voice business & rest from VAS like SMS, Ringtones, etc. Let's first check out the
Coming to the primary growth driver of all Telecom operators across the world, i.e. Data Revenues, the developments in Sept'16 quarter have been exactly as per expectations. The steady growth that both Bharti Airtel & Idea Cellular were reporting quarter after quarter over the last
Bharti Airtel has a much wider 3G as well as 4G spectrum footprint when compared to Idea Cellular. Hence Airtel is expected to post much better Data Revenue/Volume growth. But it seems like either Airtel is not able to properly utilise it's spectrum advantage or Idea is doing much better even with 3G/4G coverage is limited circles. Let us look at how the Data Volume growth is panning out for the two operators.
Despite it's spectrum disadvantage, Idea Cellular has been very aggressive on the rollout of 3G/4G services in it's circles of strength. I had mentioned this in an earlier post on Idea Cellular in June'16. The observations that I had shared in that post are certainly the reasons behind Idea's strong performance despite spectrum disadvantage. During the recently concluded Spectrum Auctions, Idea Cellular has not just managed to strengthen it's spectrum position in the circles of importance, but also increased it's 3G/4G reach into newer circles. If Idea Cellular does manage to replicate it's success in it's strong circles (even to a small extent) in the newer circles, Bharti Airtel will have more reasons to worry. And we cannot forget Reliance Jio and Vodafone. Bharti Airtel clearly needs to buckle up and prepare for more aggressive network rollout and use it's spectrum advantage to the maximum. It has clearly failed to do so until now.
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