The telecom pecking order - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

The telecom pecking order

Oct 12, 2010

The key aspect of the telecom sector is subscribers. It is the subscriber that earns revenues for the companies in this sector. Therefore, the idea has been to increase subscriber base at all costs. Operators slash rates, offer 'apps' (applications), bundled handsets; anything possible to get subscriber attention.

Therefore, the logical conclusion would be that operators who have higher market share of subscribers would automatically have higher revenue market share as well. Let us analyze the available data to see if this actually the case.

For this study we have used the subscriber data as disclosed by COAI (Cellular Operators Association of India) and AUSPI (Association of Unified Telecom Service Providers of India). For revenues, we have used the circle wise ARPU figures disclosed on a quarterly basis by TRAI (Telecom Regulatory Authority of India).

Subscriber Market Share
It is not a mystery that Bharti Airtel , the largest telecom operator in the country, has the largest subscriber base in the country. As on 30th June, 2010, it had a subscriber market share of almost 22%, followed by RCOM (17.6%), Vodafone (17.3%), Tata Tele (11.5%) and Idea Cellular (11%).

Source: COAI, AUSPI   As on 30th June, 2010

Revenue Market Share
The picture is slightly different when it comes to the share of revenues earned by the companies. While Bharti remains a leader in this category as well, the seeding order for the others is different from their subscriber shares.

Source: COAI, AUSPI, TRAI   As on 30th June, 2010

RCOM loses its second position to Vodafone. In addition, BSNL comes in on the fifth position, while Tata Tele drops down to the sixth position. The main reason behind this is the quantum of discounts offered. It is a known fact that RCOM and Tata Tele (sells under the brand name of Tata Docomo) have been aggressively pricing their services. Tata Tele changed the landscape with their per second billing and RCOM offered free minutes to lure subscribers. While this has helped them to garner a large subscriber base, it has not really translated into higher revenues for the companies.

For companies to perform well over a longer period of time, they cannot concentrate only on the subscribers. They would have to come up with strategies that help them to translate subscriber growth into revenue growth as well. After all there is no point in increasing subscribers if these subscribers don't yield reasonable income for the company. Infact in such cases the interest of the shareholders is compromised for the interest of the subscribers.

Equitymaster requests your view! Post a comment on "The telecom pecking order". Click here!

  

More Views on News

BHARTI AIRTEL 2020-21 Annual Report Analysis (Annual Result Update)

Oct 20, 2021 | Updated on Oct 20, 2021

Here's an analysis of the annual report of BHARTI AIRTEL for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of BHARTI AIRTEL. Also includes updates on the valuation of BHARTI AIRTEL.

Bharti Airtel's Humongous Rights Issue to Open on 5 October. Key Points Investors Should Know (Views On News)

Sep 23, 2021

Shares of Bharti Airtel trade near record high ahead of rights issue.

This Company has Quietly Built an Enviable Startup Portfolio (Views On News)

Sep 22, 2021

The startups era has just begun, and it will provide massive opportunities to those who can spot the right trends at the right time.

Top Stocks Riding the 5G Wave in India (Views On News)

Dec 3, 2021

The 5G revolution is unfolding at a faster rate than you would expect. Here's how you can hop on to this ride.

1,300% in One Year - Are You Kidding Me? (Views On News)

Nov 29, 2021

An amount of Rs 1 lakh invested in the midcap stock a year ago would have turned into Rs 15 lakh today.

More Views on News

Most Popular

10 Indian Companies with the Fastest Growth in Dividend Payouts... (Views On News)

Jan 10, 2022

These companies have been consistently paying higher dividends for several years.

Tata Steel vs SAIL: Which Stock is Better? (Views On News)

Jan 13, 2022

With government initiatives set to boost the steel sector, find out who has a better chance of coming out on top.

Watch Out for these 4 Indian Companies Betting Big on EV Supply Chain (Views On News)

Jan 11, 2022

The upside in supply chain players could be huge but a delay in the transition to EVs, or any policy related hiccups could end the momentum.

Tech Mahindra's CTC Acquisition: Too Expensive? (Views On News)

Jan 18, 2022

Tech Mahindra's acquisition of European IT-company fails to excite investors.

These 5 Penny Stocks are Held by Rakesh Jhunjhunwala. Worth a Look? (Views On News)

Jan 18, 2022

Rakesh Jhunjhunwala is holding these penny stocks in his portfolio for several years now.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

BHARTI AIRTEL SHARE PRICE


Jan 21, 2022 (Close)

TRACK BHARTI AIRTEL

  • Track your investment in BHARTI AIRTEL with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

BHARTI AIRTEL - TATA COMM COMPARISON

COMPARE BHARTI AIRTEL WITH

MARKET STATS