Where are the revenues going?

The telecom industry is facing is huge competitive pressures due to the entry of RJIO. Though the market leaders have been growing subscribers, however, their revenues are declining. TRAI recently updated the financial data of the industry. I have churned this data and came out with the following findings.

Gross Revenue

The following figure describes the gross revenue of the operators since 2013.

In the last quarter (Oct to Dec 2017), RJIO is ranked 3rd after Vodafone. Its gross revenue (GR) stands at Rs 7.4 K Cr. This is slightly less than the preceding quarter (Rs 7.7 K Cr). Idea has lost ground to RJIO and now is in 4th place. Its revenue has fallen to Rs 6.8 K Cr from Rs 9.1 K Cr in the preceding quarter (25% decrease). Bharti, on the other hand, has seen a 32.6% decrease from the Rs 20.5 K Cr. Vodafone has seen a similar decrease from Rs 12.3 K Cr to 9.2 K Cr (33.7 % decrease).

Adjusted Gross Revenue

The following figure describes the adjusted gross revenue of the operators since 2013.

Interestingly, in AGR terms RJIO's revenue has increased from Rs 4.4 K Cr in the preceding quarter to Rs 5.4 K Cr (23 % increase). Idea is still in fourth place with an AGR of Rs 4.7 K Cr (24.2 % decrease). Vodafone is 2nd place at Rs 5.7 K Cr (27.7 % decrease). Bharti is first at Rs 7.9 K Cr (34.2 % decrease).

License Fees

The following figure describes the outflows on license fee payments by the operators since 2013.

As regards license fees, RJIO has paid equal to that of Idea (Rs 0.4 K Cr). In fact, its payments have increased by 25% (from Rs 0.3 K Cr in the preceding quarter). Idea, on the other hand, seen a decrease of 20% (from Rs 0.5 K Cr in the preceding quarter). Vodafone has seen a decrease of 17% (from Rs 0.6 K Cr to 0.5 K Cr). Bharti has seen a decrease of 40% (from Rs 1 K Cr to 0.6 K Cr).

Spectrum Fees

The following figure describes the outflows on spectrum fee payments by the operators since 2013.

Here again, RJIO has paid equal to that of Idea (Rs 0.2 K Cr). Actually, RJIO payment on spectrum fees has increased by 100% (from 0.1 K Cr to 0.2 K Cr). Vodafone's and Idea's outflows on spectrum payments have remained unchanged since the preceding quarter. Bharti's outflow has decreased by 25% to Rs 0.3 K Cr.

Conclusion

The TRAI's data shows that the overall revenues of the Industry have declined by 25%. RJIO has gained market share and is now 3rd in the overall rank in terms of revenue market share (ahead of Idea).

(Views expressed are of my own and do not reflect that of my employer)

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