The July-September earnings of the country’s top three telecom operators — Bharti Airtel, Vodafone India and Idea Cellular — show that while competitive pressures that began with the launch of commercial services by Reliance Jio continue on the incumbents, thanks to bundled plans their voice and data volumes have surged. However, realisations on both counts continue to decline. Since data has emerged as the major area in the competitive fight, it’s the growth in volumes here that is keenly tracked by analysts. Data volumes for Vodafone, which declared its earnings on Tuesday, during the second quarter increased by 61.4% quarter-on-quarter, which is marginally lower than Bharti’s 65.9% and Idea’s 73.5%. Apart from the overall data volume growth at 73.5%, Idea’s broadband (3G and 4G) volume growth was at 81% on a quarterly basis during the period. Broadband subscribers grew by 3.2 million to 29.6 million though data subscriber remained largely unchanged at 38.1million. Its blended data average realisation per MB of Rs 2.70 contracted by 49% over the previous quarter due to pricing pressure led by Jio’s entry.
The company reported average usage of 4.7GB per broadband subscriber. In comparison, Bharti Airtel added 3.2 million data subscribers and 6.3 million mobile broadband subscribers, with average usage reaching 4GB per subscriber. Vodafone India did not provide the break-up of its data usage and realisation. Vodafone’s blended average revenue per user declined 6.6% quarter-on-quarter to Rs 132, while the same for Bharti at Rs 145 was down 6.3% quarter-on-quarter, and Idea’s at Rs 132 was down 6.4% quarter-on-quarter.
Vodafone India’s July-September revenues declined by 6.5% quarter-on-quarter to Rs 9,188 crore. In comparison Bharti Airtel’s revenue had declined by 5.2% on a quarterly basis and Idea’s by 8.6% during the same period. The July-September quarter is seasonally a week quarter for telcos. On the subscriber front, Vodafone lost 4.5 million subscribers during the quarter, taking its total subscriber base to 207.4 million. In comparison Bharti added 1.4 million users while Idea lost 6.6 million users. The combined base of Idea and Vodafone saw an erosion of 11.1 million users.
Vodafone’s adjusted Ebitda margins for H1FY18 declined 350 basis points versus H2FY17 to 21.3% on account of significant revenue erosion. While Idea and Vodafone’s margins continued to deteriorate further during the quarter, Bharti’s India business margins expanded by 30 basis points quarter-on-quarter on account of cost control initiatives. “We believe that Bharti continues to execute better than Idea and Vodafone on subscriber acquisition as well as cost side. Although Idea+Vodafone is likely to benefit from synergies from the proposed merger, it also carries execution related risks,” brokerage Edelweiss said in its note.