Smaller telcos lost 38 million subscribers on an aggregate basis: India Ratings

    The industry structure is being redrawn to oligopolistic as sponsors of smaller, unprofitable telcos exited as they were not being able to sustain losses.

    By Priyanka
    |

    According to a new report by India Ratings, over the last one year, smaller telcos lost 38 million subscribers on an aggregate basis, which has challenged their business continuity.

    Smaller telcos lost 38 million subscribers on an aggregate basis

     

    India Ratings said that most of the smaller telcos have sold a business at rock-bottom valuations and even need to restructure their debt. Adding that, from a large number of operators, the industry structure is being redrawn to oligopolistic as sponsors of smaller, unprofitable telcos exited as they were not being able to sustain losses.

    Hastened consolidation benefited larger telcos as SMS and revenue market share (RMS) of fringe telcos has come to larger telcos. Not just that, large telcos have benefited from the acquisition of spectrum and telecom assets at lucrative prices, which has, in turn, has strengthened their business model.

    Meanwhile, Reliance Jio Infocomm Limited gained RMS of 13.9 percent in 2QFY18.

    While top three telcos accounted for 66.6 percent of RMS - Bharti Airtel Limited with 28.8 per of RMS, Vodafone India Limited 20.5 percent and Idea Cellular Limited with 17.3 percent during the same quarter.

    The report said that "Subscriber growth continued to remain negative in September 2017 for the third consecutive month as per Ind-Ra's expectation. This is reflective of the industry churn, high urban teledensity and reversal of dual SIM-led inflated growth in the past."

    Ind- Ra pointed out that, RJio's SMS (subscriber market share) increased by 10.2 percent in the 12 months ended September 2017 and stood at 11.7 percent. Gross industry revenues increased by 6.6 percent q-o-q to Rs 468 billion in the quarter ending September 2017. Adjusted gross revenues grew by 8.8 percent q-o-q to Rs 307 billion in the quarter ending September 2017.

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