Jio reports positive AGR of Rs 4,270 crore for the first time in September quarter
, ET Bureau|
Updated: Nov 25, 2017, 12.24 PM IST
Reliance Jio Infocomm reported a positive adjusted gross revenue (AGR) of Rs 4,270 crore for the first time in the September quarter, which drove up overall telecom industry AGR by 8.6% sequentially in the fiscal second quarter after three successive quarters of declines.
The 8.6% on-quarter growth in the telecom industry AGR to Rs 30,800 crore was driven by "Jio recognising its revenues in the September quarter", although the 4G newcomer "benefitted by recognising its entire `Summer Surprise' (promotional offer) revenues during the period", ICICI Securities said in a note.
The Big 3 incumbent carriers, however, posted lower AGRs in the fiscal second quarter amid continued competition. Bharti Airtel's AGR dropped 10.5% on-quarter to Rs 8,600 crore, while Vodafone India and Idea Cellular's fell 11.1% and 13.8% sequentially to Rs 6,300 crore and Rs 5,300 crore, respectively, the brokerage said in a note, analysing financial data put out by the Telecom Regulatory Authority of India (Trai).
"Rising adoption of bundled plans is resulting in increased interconnection usage charges (IUC) for incumbents, leading to significant pressure on operators' AGR, especially in the weaker circles," BNP Paribas said in a note.
The Big 3 telcos have also lost AGR market share in the September quarter with rival Jio starting to report strong revenue growth during the period.
What's more, Bharti Airtel's AGR market share also fell 616 basis points (bps) sequentially to 28.8%, while Vodafone India and Idea's slipped by 454 bps and 450 bps on-quarter to 20.5% and 17.3%, respectively. Jio, on the contrary, reported an AGR market share of nearly 14%, becoming the No 2 player in Karnataka and Odisha.
Brokerage BNP Paribas said revenue market share (RMS) trends too have seen a significant change in the September quarter with "Jio eating into the market share of incumbents".
With Jio reporting a 14.5% RMS in the fiscal second quarter, Airtel, Vodafone India and Idea have all seen sequential dips in RMS during the period. Airtel's RMS in the September quarter fell 3% on-quarter to 31.2%, while Vodafone and Idea's dipped by 2.8% and 2.7% sequentially to 21.3% and 16.2%, respectively, according to a BNP Paribas note, analysing Trai data.
Deutsche Bank expects subscriber and revenue share metrics to remain volatile during FY18 on account of "rapid shifts in pricing from Jio, significant changes in voice traffic patterns due to unlimited voice plan bundles, and cut in IUC charges".
Jio had recently caused a flutter by reporting a robust average revenue per user (ARPU) of Rs 156.4 in the September quarter, which was higher than the Rs 154 reported by market leader Bharti Airtel in the April-June period, although analysts had attributed the Jio phenomenon to multiple revenue components, including recharges done in the June quarter.
Though Jio had posted a net loss of Rs 270.59 crore in the September quarter on revenues of Rs 6,147 crore, it had surprised analysts by reporting positive earnings before interest & tax (EBIT).
The telecom unit of Reliance Industries (RIL) had reported a negative Rs 1,000 crore (AGR) in the June quarter as its revenues then were lower vis-a-vis high interconnect charge (IUC) payments.
The 8.6% on-quarter growth in the telecom industry AGR to Rs 30,800 crore was driven by "Jio recognising its revenues in the September quarter", although the 4G newcomer "benefitted by recognising its entire `Summer Surprise' (promotional offer) revenues during the period", ICICI Securities said in a note.
The Big 3 incumbent carriers, however, posted lower AGRs in the fiscal second quarter amid continued competition. Bharti Airtel's AGR dropped 10.5% on-quarter to Rs 8,600 crore, while Vodafone India and Idea Cellular's fell 11.1% and 13.8% sequentially to Rs 6,300 crore and Rs 5,300 crore, respectively, the brokerage said in a note, analysing financial data put out by the Telecom Regulatory Authority of India (Trai).
"Rising adoption of bundled plans is resulting in increased interconnection usage charges (IUC) for incumbents, leading to significant pressure on operators' AGR, especially in the weaker circles," BNP Paribas said in a note.
The Big 3 telcos have also lost AGR market share in the September quarter with rival Jio starting to report strong revenue growth during the period.
What's more, Bharti Airtel's AGR market share also fell 616 basis points (bps) sequentially to 28.8%, while Vodafone India and Idea's slipped by 454 bps and 450 bps on-quarter to 20.5% and 17.3%, respectively. Jio, on the contrary, reported an AGR market share of nearly 14%, becoming the No 2 player in Karnataka and Odisha.
Brokerage BNP Paribas said revenue market share (RMS) trends too have seen a significant change in the September quarter with "Jio eating into the market share of incumbents".
With Jio reporting a 14.5% RMS in the fiscal second quarter, Airtel, Vodafone India and Idea have all seen sequential dips in RMS during the period. Airtel's RMS in the September quarter fell 3% on-quarter to 31.2%, while Vodafone and Idea's dipped by 2.8% and 2.7% sequentially to 21.3% and 16.2%, respectively, according to a BNP Paribas note, analysing Trai data.
Deutsche Bank expects subscriber and revenue share metrics to remain volatile during FY18 on account of "rapid shifts in pricing from Jio, significant changes in voice traffic patterns due to unlimited voice plan bundles, and cut in IUC charges".
Jio had recently caused a flutter by reporting a robust average revenue per user (ARPU) of Rs 156.4 in the September quarter, which was higher than the Rs 154 reported by market leader Bharti Airtel in the April-June period, although analysts had attributed the Jio phenomenon to multiple revenue components, including recharges done in the June quarter.
Though Jio had posted a net loss of Rs 270.59 crore in the September quarter on revenues of Rs 6,147 crore, it had surprised analysts by reporting positive earnings before interest & tax (EBIT).
The telecom unit of Reliance Industries (RIL) had reported a negative Rs 1,000 crore (AGR) in the June quarter as its revenues then were lower vis-a-vis high interconnect charge (IUC) payments.
