Airtel continues to grow its market share amidst intense competition: Reports

Written By:

According to the new report by research firms, Goldman Sachs and Elara Capital, India's largest telecom operator Bharti Airtel continues to grow its market share amidst intense competition.

Airtel continues to grow its market share amidst intense competition

"While the overall revenue for the industry has declined 24 percent as average revenue per user (ARPU) fell sharply due to free promotional period by RJio, we believe ARPU can improve over the financial year 2019-20 for the leaders (Airtel, Vodafone, and Idea)," Elara Capital said in its report.

It said the three companies will benefit from both elasticity in data usage and consolidation of subscriber identification module (SIM) by their users (resulting in higher wallet share from their customers).

"RJio's entry has created significant incentives for adoption of broadband with wireless broadband user addition picking up post-September 2016 but we remain skeptical about whether RJio would be the sole, or even the primary, beneficiary of this category growth. Beneficiaries are likely to be a number the top two players in each circle. From the time of launch of RJio, the mobile broadband (3G+4G) subscriber base has increased by 15.4 percent and 12.5 percent for Bharti Airtel and Vodafone, respectively. However, while BSNL has managed to hold on to its broadband subscriber base, Idea Cellular's broadband subscriber base has eroded 19.8% from its recent peak of 30.72 million in September 2016. Idea Cellular's worst loss in subscriber market share (SMS) from September 2016 to May 2017 has been in Kerala", it further said.

Meanwhile, Goldman Sachs' report said the wireless revenue growth for incumbents have seen double-digit year-on-year (YoY) declines in the past two-quarters, as they responded to Jio by lowering pricing, in some cases by as much as 90 percent.

"However, in this declining market, Airtel has been increasing its revenue market share, which at 34.1 per cent (as of March 2017) is at an all-time high," it added.

The firm further added that RJio, which has announced a sale of JioPhone from next month, the handset is unlikely to remain a competitive advantage for the company.

We believe the target market for Jio, which comprises customers that pay more than than ₹100 ARPU and buy feature phones of more than ₹1,000, is likely to be fairly small, and could actually be less than 100 million subscribers. We do not think content will lead to a competitive advantage for Jio."



Read More About airtel | telecom | news

Please Wait while comments are loading...
Opinion Poll