ICICI Securities highlights that in Q2 FY21, consumer spends on mobile services (post GST) rose 4.5% QoQ / 23.9% YoY to Rs 373 bn on relaxation of lockdown. Postpaid net revenue improved 3.6% YoY, but is still down 1.4% YoY due to no material tariff hike unlike in the prepaid segment. Prepaid net revenue grew 7.5% QoQ / 35.8% YoY and ARPU rose 7.1 QoQ / 34.3% YoY to Rs 90. 4G subscriber (sub) addition accelerated to 4.6% QoQ (net add: 29.5 mn) to 676mn on higher shipment of smartphones.

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Reliance Jio’s 4G sub market share dipped 170 bps QoQ (down 400 bps YoY) to 59.8%. Bharti Airtel’s 4G sub market share improved to 22.6%, up 120 bps QoQ / 400 bps YoY, and the company has been gaining market share in data usage, which rose 110bps QoQ / 600 bps YoY to 30.3% (significantly narrowed gap with its AGR market share, which is a positive).

The Telecom Regulatory Authority of India (Trai) has released the sector’s performance indicator report for Q2 FY21.

Highlights:

Net revenue (deducting intercompany settlements) rose 7.1% QoQ / 30.4% YoY to Rs 333 bn. ARPU (based on consumer spend) rose 5% QoQ / 26.6% YoY to Rs109 (Rs132 including GST) on tariff hikes taken in Dec’19. Postpaid net revenue grew 3.6% QoQ / fell 1.4% YoY to Rs37bn in Q2FY21. Prepaid net revenue rose 7.5% QoQ (35.8% YoY) to Rs 296 bn. Postpaid ARPU (based on net revenue) rose 4.5% QoQ (fell 5.3% YoY) to Rs 234. Prepaid revenue also benefited on shift from 2G to 4G. Data revenue (not comparable on YoY basis due to reclassification of rental revenue) rose 5.5% QoQ to Rs 290 bn (77.7% of consumer spends). Outgoing voice revenue grew 2% QoQ to Rs 65 bn.

4G sub base grew 4.6% QoQ (29.5 mn net add) to 676 mn and Reliance Jio’s 4G sub market share fell to 59.8% (down 170 bps QoQ) while Bharti Airtel’s improved 120 bps to 22.6%. Vodafone Idea’s sub market share shrunk 50 bps to 15.7%. Industry wide 3G subs continue to decline fast and were down 2.7 mn QoQ to 29 mn. In mobile broadband category (including 3G and 4G), RJio still enjoys 57.4% sub market share. Total sub-base expanded 0.7% QoQ (net add: 8 mn) to 1149 mn. Postpaid subs rose 2.7% QoQ (net add: 1.4 mn subs) to 53 mn. Bharti Airtel’s postpaid sub market share rose to 28.9%, up 60 bps QoQ, while that for Vodafone Idea’s reduced to 40%, down 180 bps.

Data usage market share rose 110 bps QoQ for Bharti Airtel:

Data usage grew 1.8% QoQ to 25,227-bn MB led by 4G segment growth of 2.2% QoQ to 24,339-bn MB (and contributed 96.5% to total data usage). 2G data volume rose 16.9% QoQ and 3G data volume was down 12% QoQ. Bharti Airtel and Vodafone Idea’s data usage market shares were 30.3% (up 110 bps QoQ) and 17.2% (down 110 bps QoQ) respectively. Industry minutes rose 1.9% QoQ to 2,613bn. Bharti Airtel’s minute market share improved to 32.9%, up 100 bps QoQ, while Vodafone Idea’s stood at 21.2%, down 130 bps QoQ. Reliance Jio’s minute market share rose 100 bps QoQ to 35.7%.