Adjusted Gross Revenue(AGR) in telecom dips by 13% in Q4

TRAI’s latest revenue data of telecom operators reveal  sequential drop  of 13.15% in Q4 owing to intensive competition in the industry. Adjusted Gross Revenue dipped from Rs34222 cr in Q3 to Rs29719 cr in Q4.  In Q1 FY17 the AGR of telcos stood at Rs 44,754 cr which is now reduced by Rs 15000cr in Q4.  Reliance Jio’s free offers continued till Mar’17 which compelled telecom operators to slash their tariffs affecting their ability to maintain revenues from existing customers. Bharti Airtel, which reported reduction in net profit by 72% in Q4, reported AGR of Rs 10360 cr slipping from Rs 11495cr in Q3.  Vodafone and Idea cellular, which are in the process to merge, reported sequential decline of 12.6% and 8 % in their AGR. Vodafone AGR stood at Rs 7258cr while Idea Cellular’s AGR was 6401 cr.  State run telecom PSU’s BSNL and MTNL  AGR reduced by more than 36% sequentially.  Hypercompetition is not just affecting the health of the industry but also revenues for the government as license fee is calculated on AGR. Total license fee as per TRAI data reflects Rs 2475 cr in Q4 compared to Rs 2878 cr in Q3.AGR 2016-17_1

AGR 2016-17

But in spite of massive onslaught of intensive competition by Reliance Jio incumbent operators have been able to register increase in their revenue market share.  Airtel , Vodafone and Idea Cellular have a combined revenue market share of more than 80% as smaller operators like Aircel, MTS and Telenor are in the process of either merging or exiting Indian telecom.  Airtel’s revenue market share increased to 34.8%  while Vodafone and Idea Cellular command 24.42% and 21.54% market share among all telecom operators at the end of Mar’17.

Revenue Market Share - 201617

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