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Airtel might have stunned the Street with better-than-expected April-June results boosted by one-time gain from tower sales, but it is Idea Cellular, which continued to outpace the largest telecom player on all major performance parameters.
However, Bharti has stopped defending its market share and appears to be focussing on growth, if its subscriber growth is any indication. Bharti AIrtel has also brought down churn down to an average of 2.7 per cent levels, which is better than the industry standard of 5 per cent. The declining subscriber trend has reversed thanks to Bharti going after the rural market.
"In the past few quarters, Bharti's subscriber adds were weak but now it is catching up on that too," said Vivekananda S, telecom analyst at HDFC Securities.
A like-to-like comparison shows that Idea revenue grew by 4.5 per cent quarterly basis in April-June period, higher than 3 per cent growth reported by Airtel during the same period for its India wireless business. In case of net income, Airtel net profit for Indian subcontinent region actually declined by 6.7 per cent in the first quarter, while Idea reported 28 per cent jump in net profit for the period.
During the quarter, most telecom operators said their revenue was impacted by reduction in interconnect usage charge (IUC) , which operators pay each other for connecting inter-network calls. The charge was reduced to 14 paise per minute from 20 paise in late February this year and the impact was visible in the first quarter.
Even after the cut in ICU rates, Idea's fall in average realisation per minute (ARPM) was lower than Airtel during the period. The third largest operator by number of subscribers reported 2.9 per cent decline in voice ARPM, while for Airtel it was 4 per cent drop from previous quarter.
"Idea has been historically growing faster than Airtel due to its lower customer base. The growth rate shows Idea has been gaining market share, not necessarily from Airtel but from other operators," said Sobhit Khare, research analyst with Motilal Oswal.
| Parameters | Airtel (q-o-q) | Airtel (y-o-y) | Idea (q-o-q) | Idea (y-o-y) |
| Revenue growth | 3% | 8% | 4.50% | 16.40% |
| Subscriber growth | 1.80% | 10% | 2.70% | 16.60% |
| Minutes of Use (MoU) | 1% | -3% | 2% | 1.70% |
| Data traffic growth | 18% | 83% | 15% | 79% |
| Source: Companies | ||||
Barring key growth rates, Airtel fared well in some business. For example, its data revenue accelerated during the quarter to become 19.2 per cent of its India revenue, from 17.6 per cent in the previous quarter, a rise of 160 basis points (bps). In the same period, Idea revenue from data business was increased 80 bps from January-March quarter to become 17.7 per cent of total revenue in the first quarter of current fiscal. One basis point is hundredth of a per cent.
"In data, Idea's growth rate was slightly higher but Bharti is growing at a healthy pace. Bharti's data revenue growth rate suggests that Bharti, which was trailing, is now catching up on data," said Vivekanand.
In case of data business, Airtel remained strongest at Rs 25.57 paisa per MB revenue, higher than 24.6 paise made by Idea in the same period.
