The telecom industry reported AGR growth of 7.1 per cent on-quarter and 13.1 per cent on-year during the fiscal second quarter to Rs 681 billion, showed data released by TRAI. The growth, stated an analysis report by JM Financial, was led by 15-17 per cent tariff hike undertaken by private telcos with effect from July 2024 and aided by one more day during the quarter and telcos’ continued premiumisation efforts including a) MBB (mobile broad-band) upgrades; b) prepaid-to-postpaid upgrades; c) data monetisation; and d) international roaming. However, it added, growth was offset by subscriber churn (of 16.8 million in Q2FY25) primarily due to temporary SIM consolidation in the lower ARPU segment post tariff hike.
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JM Financial further noted that the complete flow-through of the recent tariff hike to revenue is likely by the next 2-3 quarters for Jio and by Q3FY25 for Bharti Airtel given a higher proportion of Jio’s subs is on long-duration plans. Separately, Vodafone Idea’s AGR increased only by 0.4 per cent QoQ to Rs 98 billion as the 7.8 per cent QoQ tariff-hike-led rise in AGR (excl. NLD/ILD) was mostly offset by 21.4 per cent QoQ decline in ILD/NLD revenue. However, the brokerage firm maintained, BSNL’s AGR (incl. NLD/ILD) rose by 9.6 per cent QoQ to Rs 28 billion in Q2FY25 and AGR (incl. NLD/ILD) market share improved marginally QoQ to 4.1 per cent in Q2FY25 (up 9bps QoQ but down 24bps YoY) due to subs gains post the recent tariff hike by private telcos as it kept its tariff unchanged.
Performance across telecom companies
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Per analysis by JM Financial, Jio’s Q2FY25 AGR (incl. NLD/ILD) improved by 6.7 per cent on-quarter to Rs 283 billion, led by the July 2024 tariff hike and aided by one more day during the quarter. However, its AGR (incl. NLD/ILD) market share declined slightly QoQ to 41.5 per cent in Q2FY25 (down 14bps QoQ but up 40bps YoY) due to slower tariff-hike flowthrough and higher subs churn in the lower-ARPU segment.
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