Jio trumps Airtel, Vodafone Idea on RMS front in Q1FY23: ICICI Securities

Reliance Jio grabbed more revenue market share (RMS) in the fiscal first quarter at the cost of both Bharti Airtel and Vodafone Idea (Vi) as the market leader gained from the spill-over impact of tariff hikes taken last December as it has more 4G users, many of whom are on longer-validity plans, said experts, analysing latest financial data put out by the Telecom Regulatory Authority of India (Trai).

Jio is the sole telco to report a gain in its AGR (including NLD) market share, commonly known as RMS, which rose 6 basis points (bps) sequentially, rising to 40.9% in the June quarter.

By contrast, both Airtel and loss-making Vi lost RMS in the first quarter, FY23. Airtel and Vi’s June quarter RMS fell 50 bps each sequentially to 35.5% and 17.7% respectively, telco financial data put out by Trai showed.

RMS is a measure of overall telecom market leadership. A basis point is 0.01%.

”Airtel has lost AGR (incl. NLD) market share of 50bps QoQ due to a correspondingly higher growth for Jio that has benefited from the tariff hike spillover as it has a bigger sub-base with long validity recharges,” ICICI Securities said in note, analysing Trai data.

It added that Vi too lost revenue share as it underperformed in key leadership circles such as Gujarat, AP, TN and Kerala.

Apart from having fewer customers on longer-validity plans, Airtel and Vi were also impacted on the RMS score by costlier mobile services and reduced smartphone sales.

Trai data, though, shows that all three telcos reported sequential growth on the AGR (including NLD revenue) front in the April-June period, partly helped by the residual impact of the tariff hikes taken last winter. Jio’s on-quarter AGR growth was the highest among the three operators.

Jio, Airtel and Vi reported 4.1%, 2.6% and 1% sequential rises in AGR (including NLD revenue) to Rs 21,800 crore, Rs 18,900 crore and Rs 9,500 crore respectively in the fiscal first quarter.

Analysts said Trai data showed that overall June quarter sectoral AGR (including NLD) rose 4% sequentially to Rs 53,400 crore, partly driven by last round of tariff hikes, But they said the benefits of premiumisation were limited, which coupled with SIM consolidation had offset some revenue growth.

SIM consolidation causes a sharp drop in the number of mobile SIMs or “connections” in the market when consumers make fresh choices on their preferred telco brands — based on quality of services – after a round of steep price hikes. It can also happen when a telco removes low-value customers, following a price hike.