Adjusted gross revenue (AGR) in the telecom sector rose 7.2 per cent year-on-year (Y-o-Y) to Rs 61,400 crore in the first quarter (April-June) of FY25, coming as a surprise to analysts who point to the lack of a major tariff action by the telcos. On a sequential basis, growth stood at 0.7 per cent.
Calculated on an annualised basis, the Q1FY25 industry AGR (including the National Long Distance service) jumped to Rs 2.45 trillion, an analysts’ report by ICICI Securities pointed out. “We are impressed telcos were able to grow revenues at a healthy pace despite no major change in tariffs, and premiumisation playing out nicely,” it said.
Sectoral revenues are expected to grow at a compounded annual growth rate (CAGR) of 15 per cent to $38 billion by FY26, up from $29 billion in FY24 with market share gains for Airtel and Jio, an analyst note released by Jefferies said. In FY24, the sector had witnessed an 8.24 per cent growth in AGR, reaching Rs 2.7 trillion, up from Rs 2.49 trillion in FY23, figures from the Telecom Regulatory Authority of India (TRAI) show.
During the latest quarter, annualised sector revenues continued to scale up to a new peak of $30 billion, but sector revenue growth moderated to 7 per cent Y-o-Y, the note said. “While average subscriber growth moderated slightly to 2 per cent Y-o-Y, slower growth in Average Revenue Per User (ARPU) of 5 per cent Y-o-Y resulted in the moderation in revenue growth,” it added.
Airtel takes the lead
Including NLD, Jio had 42.7 per cent RMS in Q1, followed by Airtel’s 38.3 per cent and Vi’s 15 per cent, ICICI Securities said. BSNL made up the rest at 4 per cent.
But between the two leading telecom operators, the difference in growth has come down, trends suggest. “Convergence in growth of Bharti and Jio is likely to keep pricing disciplined since tariff differential is not adding to growth differential,” Jefferies said.
While cautioning that Airtel’s circle-wise revenue is strictly not comparable as it has made some changes in revenue recognised under NLD/circle, thereby increasing circle revenues for Q1, ICICI Securities said Airtel saw higher growth in 16 of the 22 telecom circles in the country.
Jio is losing revenue market share to Airtel in Delhi, UP West, UP East, Himachal Pradesh, West Bengal, Bihar, and Kolkata circles. The bulk of Airtel’s market share gains in Q1 came from Delhi, Bihar, and West Bengal.
First Published: Sep 05 2024 | 6:18 PM IST