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RMS: Volatility in NLD revenues overshadows underlying trends

* AGR for the industry, including NLD revenues, rose 4% qoq and 15% yoy, adj. for BSNL as its reporting has undergone a change from Q2FY21. Among private telcos, Jio posted the highest sequential growth of 11% (Note: our market share analysis excludes BSNL).

* NLD-AGR for the industry declined 10% qoq, with all the operators - except for Jio - seeing a contraction. Jio’s NLD-AGR revenues were negative in the base quarter. This has partially impacted the LTL comparison of market share trends as well.

* Along with TTSL, Bharti Airtel saw just 1% rise in AGR, including NLD revenues. RMS contracted by 97bps qoq to 36.9%. Its Top-7 revenue contributing circles witnessed 8% growth qoq. Bharti’s ranking in Delhi and Punjab slipped but improved in NE.

* Jio posted strong AGR growth of 11% qoq, along with a 246bps expansion in RMS. This was partially supported by NLD revenues. Jio moved up the ranks in the Delhi and Punjab circles, and now commands the No.1 position in 16 circles overall.

Reported AGR, including NLD revenues, increased 3% qoq and 14% yoy. However, adjusting for BSNL’s revenues and on an LTL-comparative basis, growth stood at 4% qoq and 15% yoy, supported by robust growth from Jio and stable revenues from Bharti. VIL saw a 2% sequential fall. In seven circles, industry revenues increased in double-digits, while Delhi and Mumbai saw qoq revenue declines.

Circles such as Tamil Nadu, Delhi, Gujarat, Karnataka and Punjab saw a marginal drop or lower-than-blended average industry growth of 3.5% qoq. UP-E saw highest growth, backed by all the operators. Revenue decline in Delhi and Mumbai was due to Bharti and VIL. NLD revenues continued to be volatile and registered a 10% fall qoq and 11% yoy. BSNL saw the highest decline, followed by Bharti and VIL.

On the other hand, Jio saw positive numbers after seeing negative NLD revenues in the last quarter. Including NLD revenues, Jio was the only private telco to post RMS expansion (41.8%, up 246bps qoq). On the other hand, Bharti + TTSL recorded an RMS contraction of 97bps. VIL continued to lose market share in this quarter, with its RMS standing at 19.7% (-131bps qoq and -314bps yoy).

Note that all comparisons, unless specified, are based on AGR as circle-wise NLD revenues are not available.

Jio: AGR, including NLD revenues, saw strong growth of 11% qoq. NLD revenues stood at Rs2.2bn vs. (Rs742mn) in Q4FY21. Adjusting for normalized NLD revenues, AGR was up 9% qoq. RMS expanded by 246bps sequentially. The pace of RMS gains on a yoy basis moderated to 80bps. Top-7 revenue contributing circles witnessed 8% growth qoq and 17% yoy. Circles that saw relatively lower growth were AP, HP, Mumbai, NE and Rajasthan.

Bharti Airtel (including TTSL): AGR rose just 1% qoq, driven by the standalone Bharti entity, as TTSL saw a 5% qoq decline. RMS was muted and contracted sequentially, while it expanded by 272bps yoy. NLD revenues were down 16% qoq and 17% yoy, impacting overall growth and RMS in the quarter. Seven circles recorded average revenue growth of 17%, while Mumbai and Delhi saw declines of 16% and 19%, respectively. Among the Top-7 circles (contributing 53% of revenues), Maharashtra and UP-E recorded double-digit increases.

Vodafone-Idea (VIL): The sequential decline of 12% in NLD- AGR revenues led to a fall in overall AGR revenues. RMS continued to contract and stood at 19.7%, down 131bps qoq. Among the circles, sharp moves were seen, with revenue growth in the range of 2-67% in a few circles and a decline in other circles in the range of 2-44% qoq. Others: BSNL’s reported revenues, including NLD, dipped 3% qoq, with NLD revenues falling 19%. Meanwhile, MTNL saw a healthy 136% rise in AGR, although on a low base. We maintain OW on Bharti and UW on VIL in EAP.

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