Bharti Airtel replaces Vodafone Idea in second spot by mobile revenues

Bharti Airtel becomes second highest mobile revenue company replacing Vodafone Idea. This comes after the company changed its strategy and focused on data subscribers along with weeding out low revenue customers. This strategy was not implemented by Vodafone Idea making it loss its place.

Though, there is rise in network and content costs for Bharti as it views a steady rise in mobile data customers.

Airtel’s have reported mobile revenues for the April-June quarter (Q1) of Rs 10,866 crore (US$ 1.51 billion). The analysts have claimed that this makes it the number 2 player after Reliance Jio in terms of mobile services revenues.

Vodafone Idea reported an overall revenue figure of Rs 11,269 crore (US$ 1.56 billion) for Q1, even though it did not disclosed break-up of revenue.

Bharti Airtel witnessed a loss of only 1.5 million subscribers in June quarter, against 14 million subscribers lost by Vodafone Idea. Airtel has seen benefit because of managing data traffic and its data traffic growth was 13 per cent successively and its average data usage was even higher than Jio’s (a 4G-only player) at 11.9 gigabyte per month per user.

Still, its mobile 4G data customers increased by 63.3 per cent reaching 95.2 million in Q1, compared to 58.3 million in the corresponding quarter last year. The company also witness a growth in content costs.

In FY19, content costs for Airtel rose 30 per cent year on year (YoY), reflecting the impact of content deals with Zee5 and Netflix. Its passive infrastructure charges, rose, too by 12 per cent. Earnings before interest, tax, depreciation, and amortisation (EBITDA) margin declined on account of network expansion.

There is increase in spending on content leading to rapid growth in Airtel’s 4G base in the past one year. In Q1 FY19, Airtel and Vodafone Idea had nearly equal, approximately 58 million, 4G subscribers. In Q1 of 2019-20, Airtel raced ahead to 95 million subscribers, leading by 11 million to that of Vodafone Idea’s. However, Vodafone Idea grew 4 per cent in terms of average revenue per user (ARPU), even as it lost 14 million subscribers, Airtel registered an industry best ARPU of Rs 129 for Q1, a 5 per cent growth. In the return, it lost 1.5 million subscribers only.

This is seen as a positive sign. Airtel was able to maintain its top slot in the market in terms of revenue, as its top line was up 2.8 per cent at Rs 15,345 crore (US$ 2.13 billion). Vodafone Idea posted revenues of Rs 11,269.9 crore (US$ 1.56 billion) in Q1 and Jio’s revenues were Rs 11,679 crore (US$ 1.62 billion). Bharti Airtel’s India revenue is an integrated number comprising wireless, landline and broadband services.

In Q1 of the current financial year, Airtel’s mobile revenues saw a YoY growth of 3.7 per cent whereas, Vodafone Idea revenue slipped by 4 per cent sequentially, as its strategy to execute similar minimum recharge plans to boost revenue did not see the desired offtake.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.