Telecom sector revenue growth up 5% in Q2FY21
NEW DELHI: Telecom sector’s revenue growth picked up to about 5% in the September quarter against 1% in the June quarter after relaxation of lockdown curbs, according to a latest report.
Bharti and Jio gained market share from Vodafone Idea, while Airtel continued to “outperform” on key operating metrics, Jefferies has said in a recent note.
“During 2QFY21, aggregate revenue growth for the top-3 operators picked up to 5% quarter-on-quarter versus 1% per cent quarter in quarter in 1QFY21, largely due to relaxation of lockdown,” Jefferies added.
Seen quarter-on-quarter, Bharti Airtel reported the highest revenue growth at about 7% sequentially, against Jio’s 6% and Vodafone Idea’s (VIL) 1%.
Bharti’s operating metrics continue to outperform, it observed.
“While gross subscriber additions picked up for all three operators quarter on quarter, fall in churn levels helped Bharti outperform peers on net additions during 2Q. Notably, Vodafone
Idea’s gross adds remain depressed since December-19 tariff hikes,” it said.
In its report on Monday, BofA Securities said trends in the second quarter of FY2021 indicated that Bharti gained market share, on the back of 7.4% sequential growth.
“In our view SIM consolidation was a primary driver which benefitted Bharti the most in this quarter. Bharti showed 13.9 million net adds,” BofA said.
For Jio, net customer additions stood at 7.3 million during the quarter, while Vodafone Idea lost 8 million subscribers.
“A worrying factor for Vodafone Idea in our view is that data/ voice traffic on its network declined 4%/4% versus other telcos showing increase. This shows impact from users churning and also indicates less engagement (implying secondary SIM),” BofA Securities note added.
It further anticipated that Vodafone Idea would need to “lead” the tariff hike given a weak balance sheet. “Bharti and Jio are likely to be the followers but unlikely to lead any tariff hike given their better competitive positioning,” it said.