Our analysis of quarterly circle-wise data suggests (1) broad-based market share gains for Bharti and Jio on VLR subscriber base at the expense of VIL, (2) Bharti's revenue market share gain is higher than its subscriber gains in all circles and is also better than that of Jio, and (3) Bharti's implied ARPUs are at a significant premium to Jio and VIL in most circles affirming its superior subscriber mix. VIL's revival will be a daunting task as it lost ground across all circles in the past 1-2 years and is left with only seven circles with 25%+ revenue share. We will watch out for further shifts in market share post the recent hike in prepaid plans.
Broad-based subscriber market share gains for Bharti and Jio at expense of VIL in past one year
Our analysis of quarterly circle-wise VLR subscriber market share indicates, Bharti and Jio have gained share across most circles at the expense of VIL over the past one year-(1) Bharti and Jio have gained 1.8% and 2.5% market share respectively by the quarter ending September 2021, while VIL lost 3.6% market share in the given period, (2) Bharti and Jio have gained market share in 18 and 21 circles out of 22 respectively, while VIL has lost market share across all circles, (3) Jio's yoy gains have been higher than Bharti across the Metros, Circle A and Circle C categories, while Bharti gained relatively more in Circle B; VIL lost significant ground across all key circles over the past one year and (4) Bharti leads on VLR market share front in 13 circles, Jio in 6 circles and VIL in only 3 circles.
Bharti's RMS gains are greater than subscriber share gains in all circles, also better than Jio's
Our analysis of the quarterly circle-wise gross revenue market share indicates, Bharti has benefited the most over the past one year with its revenue market share gains being superior than subscriber gains in all circles and also significantly higher than Jio-(1) Bharti has gained 4.8% revenue market share by the quarter ending September 2021 versus a modest 0.2% gain for Jio and a decline of 3.6% for VIL, (2) Bharti's yoy revenue market share gains are superior than its VLR subscriber gains in all 22 circles, while Jio managed to do that in only 4 circles, (3) Bharti has gained market share in all but one circle, while Jio has gained market share in 12 circles and VIL lost market share in all but one circle and (4) Jio leads on revenue market share front in 13 circles, Bharti in eight circles and VIL in one circle only. We note that gross revenues include inter-circle charges and are higher than the reported revenues by the companies; however, trends are generally indicative of rising share for Bharti.
Bharti's significant ARPU premium in most circles affirms a superior mix of subscribers
Our analysis of implied ARPUs, based on gross revenues divided by average overall subscribers in 2QFY22, indicates that Bharti has a superior mix of subscribers-(1) Bharti's implied ARPU ranges from Rs134-330/month and is at a significant premium to both Jio and VIL in 15 circles, (2) Jio's ARPU ranges from Rs133-174/month and is at a relatively modest premium to Bharti in 7 circles only, including 5 in Circle C regions and 2 in Circle B, and (3) not surprisingly, VIL's ARPU is significantly lower than Bharti/Jio across all circles, ranging from Rs83-228/month. We refrain from comparing historical numbers due to removal of IUC charges from January 2021; however, trends are generally indicative of a rising premium for Bharti.
Daunting task ahead for VIL to revive its position as it continues to lose ground across circles
VIL has lost significant market share based on VLR subscribers as well as gross revenues across all circles over the past two years. VIL now has only 7 circles left with 25%+ revenue market share as compared to 9 five quarters ago and 14 nine quarters ago; on the subscriber front, it still has 10 circles with 25%+ market share. In our view, VIL has a daunting task to revive its position for its focus circles, which will necessitate large investments in network infrastructure to compete with Bharti and Jio, in turn requiring capital infusion and further tariff hikes.