Indian Telecom Story (Part IV): An year end Analysis of Revenue and Subscriber market share trends in Indian Telecom Bazaar

The top 6 operators in the Indian Telecom space are thus stacked up in terms of Revenue market shares and subscriber market shares! It is not surprising to find Airtel at the tip of the heap both in subscriber and revenues. However, It is Vodafone that is almost par with Reliance in Subscribers and trounces it in the revenue market share by a whooping mile! In fact Reliance is so low in terms of revenue shares that the no 4 (BSNL/MTNL) and no 5 (Idea) are biting at its end! Tata Teleservices comes up last in the list!

1. Airtel seems to consolidate its national footprint quite handsomely with a 14% increase in revenue shares. It has the highest ratio of revenue to subscribers! Again indicating that Airtel seems to have built some stickiness with the high ARPU consumers. One would imagine so beacuse high ARPU consumers do a lot of travelling and Airtel gives them the seamless connectivity!

2. Idea has seen a 22% increase in its revenue share, with an increase in its circles coverage from 12 in 2007 to 15 in 2008. Drop in ARPU has not been compensated as much by subscriber addition, which is why the index stands low amongst all the GSM private entities!

3. Vodafone traditionally is one of the higher ARPU players! However, its launch in C Circles seems to have taken some of the sheen away from its revenue/ subscriber index i.e most of the acquisition that has happened in thesecircles has been low ARPU consumers.

4. BSNL + MTNL have seen erosions both in revenue share as well as in ARPU! Also it has lagged the growth rate of the telecom market in 2008! No wonder then that, they are rushing into 3G to boost their ARPUs/Revenues!

5. Reliance and Idea, the CDMA operators have had a bad year! more people are choosing GSM services over CDMA. There appears to be a churn from CDMA to GSM as well. There is a erosion in higher end consumers who probably are flocking to GSM players as more and more are opening up to all circles! Indian CDMA operators have consistently seen a decline in Revenue Market share from 21.6% in Q3 FY08 to 17.9% in Q3 FY09. While GSM operators managed to gain the loss of CDMA operators and now control a whopping 82.1% of the Indian wireless space. Will the trend change with Sistema’s entry into the space ? Or something needs to be changed in the CDMA ecosystem to make it fit in the context of the second largest wireless market in the world ?