Vodafone Idea’s revenue market share has fallen to an all-time low of 14.5% in the July-September quarter, as the company witnessed share loss in all 22 circles, according to data by Telecom Regulatory Authority of India (Trai).
In the preceding quarter, the company’s revenue market share was at 15%. Analysts said that the company lost higher market share in metros, A and B-circles and a lower market share in C-circles. The reason for the same can be attributed to porting out by users to to Jio and Airtel as Vodafone Idea’s network is seen as weak due to poor investments.
However, post the recent fundraise via follow-on public offer (FPO) and equity infusion by promoters, the company has started making investments in network expansion.
“VIL’s (Vodafone Idea) broad-based market share loss indicates that market share gains would continue to benefit Jio and Bharti in the near term till VIL completes its network investments,” Jeferries said in a note analysing Trai data.
Vodafone Idea has been losing mobile subscribers for a while despite investments in 4G capacity and coverage expansion. In the July-September quarter, the company lost 5 million subscribers sequentially owing to tariff hikes.
The tariff hikes, however, also helped Vodafone Idea to report revenue growth for the fourth straight quarter.
At the recent call with analysts, Vodafone Idea CEO Akshaya Moondra had said, the company has already started seeing improvements on key metrics in areas where the investments have been made. However, “at this point they do not convert to an increase in revenues or reducing the loss of subscribers,” he said.
The company has so far not been able to close its Rs 25,000 bank debt round, to service a capex of Rs 50,000-55,000 crore over the next three years.
Compared to Vodafone Idea, revenue market shares of Jio and Airtel, were at 42% and 39%, respectively, according to Trai data. During the quarter, Bharti Airtel reported the highest growth at 17.6% YoY, driven by Arpu growth of 15% YoY. Jio’s revenue growth, though slower than Bharti’s, was 14% YoY.
According to analysts, Airtel was the market leader by revenue share in metros and A-circles in the July-September quarter with 41% and 40% market shares, respectively.
“Given the tariff hikes undertaken in July, we believe Arpu growth will remain strong. Bharti Airtel’s and Jio’s growth of 14-18% YoY is robust considering only partial flow-through of tariff hikes. VIL’s net revenues grew 2% YoY — the fourth straight quarter of growth — despite continued subscriber losses (9% YoY decline in average active subscribers),” Jefferies said.
The sector’s revenue growth was 13% YoY to $32 billion (around Rs 2.7 lakh crore). Analysts expect the sector’s revenue to grow at a 14% CAGR to $38 billion over FY24-26, with market share gains for Bharti and Jio.