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Telecom industry AGR grows 1.9% in FYQ4, Airtel closes gap with Jio: ICICI Securities

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In Short:

The telecom industry’s revenue increased in the January-March quarter, with Bharti Airtel narrowing its market share gap with Reliance Jio. Airtel’s revenue market share rose to 37.9%, while Vodafone Idea’s market share slipped to 15.4%. Airtel experienced growth in all circle categories, while Jio lost market share in 11 circles. Overall, telcos were able to grow revenues despite no major tariff changes, with AGR reaching Rs 2,34,600 crore in FY24.

Telecom Industry’s AGR Grows in Q1, Bharti Airtel Narrows Gap with Reliance Jio

The telecom industry’s adjusted gross revenue (AGR) in the January-March quarter grew 1.9% sequentially and 9.7% on year to Rs 58,200 crore, as the premiumisation trend helped offset the drag due to the absence of any major tariff hikes.

Market Share Analysis

According to an ICICI Securities report, Bharti Airtel has through the year ended March 31, narrowed its revenue market share (RMS) gap with Reliance Jio while Vodafone Idea continued to cede ground.

The report stated, “We are impressed that telcos were able to grow revenues at a healthy pace despite no major change in tariffs, and premiumisation playing out nicely. In FY24, industry AGR (including National Long Distance) revenue rose 8% to Rs 2,34,600 crore.”

Bharti Airtel’s revenue market share rose to 37.9%, up 35 basis points (bps) sequentially and 139 bps on year, in the fiscal fourth quarter, narrowing the gap with Reliance Jio.

The AGR (including national long distance) of Airtel stood at about Rs 23,100 crore for the three-month period while that of Jio was Rs 25,700 crore.

Vodafone Idea saw a slip in AGR to Rs 9,400 crore, leading to shrinking of its revenue market share to 15.4%.

Market Dynamics and Analysis

As per the circle-wise analysis by ICICI Securities, Airtel grew faster in metros with a sequential growth rate of 3.8%, followed by category B circles, which grew 2.5%. Jio witnessed a muted growth in metros and lost AGR market share in 11 circles.

“Circle-wise analysis shows RJio is losing ground in Delhi, Mumbai, UP West, West Bengal, Bihar and NE,” ICICI Securities said.

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