Bharti Airtel replaces Vodafone Idea in second spot by mobile revenues

Focus on 4G subscriber growth balances rising cost for telecom firm.

Focus on data subscribers and weeding out low revenue customers have helped Bharti Airtel, while its peer Vodafone Idea could not implement the strategy.

However, network and content costs are on the rise for Bharti as it witnesses a steady rise in mobile data customers.

Further, Airtel’s reported mobile revenues for the April-June quarter (Q1) was Rs 10,866 crore. This makes it the number 2 player after Reliance Jio in terms of mobile services revenues, analysts claimed.

Vodafone Idea, which does not share the break-up of revenues, reported an overall revenue figure of Rs 11,269 crore for Q1.

A Mumbai-based analyst noted that Vodafone Idea draws over Rs 600 crore from enterprise customers as well as broadband (or fixed services). Adjusting for it, the mobile service revenues for Vodafone Idea would be Rs 10,669 crore, making it the third-largest telecom firm by mobile revenue after Jio’s figure of Rs 11,679 crore.

Merged Vodafone Idea does not share the break-up of revenues. However, according to analysts, the comparative fixed revenue value should be around Rs 600 crore. Vodafone Idea said it reports only consolidated revenues.

Bharti Airtel lost only 1.5 million subscribers in June quarter, against 14 million subscribers lost by Vodafone Idea. What worked for Airtel was that its data traffic growth was 13 per cent sequentially and its average data usage was even higher than Jio’s (a 4G-only player) at 11.9 gigabyte per month per user.

However, as its mobile 4G data customers increased by 63.3 per cent to 95.2 million in Q1, compared to 58.3 million in the corresponding quarter last year, the company’s content costs also grew.

“In 2018-19 (FY19), content costs (for Airtel) rose 30 per cent year on year (YoY), reflecting the impact of content deals with Zee5 and Netflix,” said G V Giri, analyst, IIFL.

Its passive infrastructure charges, too, rose 12 per cent. Earnings before interest, tax, depreciation, and amortisation (Ebitda) margin declined on account of network expansion.

Business Standard