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TRAI 2Q data: The strong are getting stronger; Buy Bharti/Idea
Bharti/Vod/Idea gained 80.9% of incremental market share in 2Q
TRAI’s 2Q11 gross revenues data indicates that Bharti has reversed its
revenue market share decline trend in 2Q (increased revenue market share
by 45 bps qoq to 30.8%) and gained the maximum incremental revenue
market share in 2Q. Idea/Vodafone continued to increase their revenue
market share further by 17/17 bps qoq to 13.9%/21.7% respectively.
Amongst non-incumbents, Aircel/Uninor increased their market share by
5/34 bps to 4.7%/1.6% respectively. Tata DoCoMo market share was stable
at 8.6%. Operators which lost further market share in 2Q11 are RCOM
(down 77 bps) and BSNL (down 44 bps). The top 3 operators – Bharti,
Vodafone and Idea gained 80.9% of the incremental revenue market share
in 2Q (vs. 56.6% in 1Q) suggesting that the strong are getting stronger.
Bharti gained mkt share in 10 circles in 2Q (vs. 3 circles in 1Q)
In 2Q, Bharti gained revenue market share in 10 circles (vs. 3 in 1Q) and
lost market share in 12 circles (vs. 19 in 1Q). Bharti showed a strong double
digit qoq revenue growth in Delhi, Kolkata, TN, Himachal and J&K in 2Q
reversing its trend of steep decline in revenues in 1Q in these circles. We
suspect this is mainly due to some reversal of intra-circle roaming
arrangement on 2G. Idea on the other hand, gained revenue market share
in 18 circles (vs. 15 in 1Q) and lost market share in 4 circles (vs. 5 in 1Q).
Interestingly, Idea has gained market share in all its 9 new circles,
suggesting steady improvement in these circles.
RCOM showed -3% qoq change in rev. as per TRAI vs +3% reported
Surprisingly for RCOM, revenues declined 3% qoq as per TRAI data, versus
company reported 3% qoq increase in wireless revenues. RCOM mgmt
believes the reason for this is stronger growth in data revenues, which is
not captured in the TRAI data. The qoq decline in revenues as per mgmt is
mainly due to decline in fixed wireless terminal revenues.
Weak competitors/data differentiation to drive mkt consolidation
We expect Bharti/Vodafone/Idea to continue to gain incremental market
share as its competitors are struggling to gain traction and facing financial
constraints. Even 3G will help operators to differentiate their services and
therefore help them gain revenue market share further. Reiterate Buy on
Idea/Bharti.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
TRAI 2Q data: The strong are getting stronger; Buy Bharti/Idea
Bharti/Vod/Idea gained 80.9% of incremental market share in 2Q
TRAI’s 2Q11 gross revenues data indicates that Bharti has reversed its
revenue market share decline trend in 2Q (increased revenue market share
by 45 bps qoq to 30.8%) and gained the maximum incremental revenue
market share in 2Q. Idea/Vodafone continued to increase their revenue
market share further by 17/17 bps qoq to 13.9%/21.7% respectively.
Amongst non-incumbents, Aircel/Uninor increased their market share by
5/34 bps to 4.7%/1.6% respectively. Tata DoCoMo market share was stable
at 8.6%. Operators which lost further market share in 2Q11 are RCOM
(down 77 bps) and BSNL (down 44 bps). The top 3 operators – Bharti,
Vodafone and Idea gained 80.9% of the incremental revenue market share
in 2Q (vs. 56.6% in 1Q) suggesting that the strong are getting stronger.
Bharti gained mkt share in 10 circles in 2Q (vs. 3 circles in 1Q)
In 2Q, Bharti gained revenue market share in 10 circles (vs. 3 in 1Q) and
lost market share in 12 circles (vs. 19 in 1Q). Bharti showed a strong double
digit qoq revenue growth in Delhi, Kolkata, TN, Himachal and J&K in 2Q
reversing its trend of steep decline in revenues in 1Q in these circles. We
suspect this is mainly due to some reversal of intra-circle roaming
arrangement on 2G. Idea on the other hand, gained revenue market share
in 18 circles (vs. 15 in 1Q) and lost market share in 4 circles (vs. 5 in 1Q).
Interestingly, Idea has gained market share in all its 9 new circles,
suggesting steady improvement in these circles.
RCOM showed -3% qoq change in rev. as per TRAI vs +3% reported
Surprisingly for RCOM, revenues declined 3% qoq as per TRAI data, versus
company reported 3% qoq increase in wireless revenues. RCOM mgmt
believes the reason for this is stronger growth in data revenues, which is
not captured in the TRAI data. The qoq decline in revenues as per mgmt is
mainly due to decline in fixed wireless terminal revenues.
Weak competitors/data differentiation to drive mkt consolidation
We expect Bharti/Vodafone/Idea to continue to gain incremental market
share as its competitors are struggling to gain traction and facing financial
constraints. Even 3G will help operators to differentiate their services and
therefore help them gain revenue market share further. Reiterate Buy on
Idea/Bharti.
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