Telecom Services share price target

India's total wireless subscriber base increased marginally MoM by 26.7 lakh subscribers on a net basis, reaching 114.5 crore in July.

Reliance Jio and Bharti Airtel experienced subscriber gains, while Vodafone Idea and BSNL continued to lose subscribers.

India's total wireless subscriber base increased marginally MoM by 3.7 lakh subscribers on a net basis, reaching 114.4 crore in June.

Reliance Jio and Bharti Airtel experienced subscriber gains, while Vodafone Idea and BSNL continued to lose subscribers.

Industry AGR (incl. NLD) in Q1FY24 grew 2.3% QoQ / 7.3% YoY to INR 573bn. Bharti Airtel’s (Bharti) AGR market share was at 37.2%, up 168bp YoY, with YoY incremental AGR of INR 23.4bn vs RJio’s INR 20bn. The latter’s AGR market share improved by 73bp YoY to 41.6%.

We have revisited our industry macro-model to realign our assumptions for next three years. We now expect industry AGR (incl. NLD) CAGR at 12% to INR 3,065bn over FY23-FY26E (vs 15.4% CAGR over FY20-FY23). Our assumption bakes-in organic growth of >6% CAGR and one tariff hike of ~10% in FY25E. Bharti’s AGR market share is likely to jump 125bps in the same period to 37.5% (vs +545bps to 36.2% in past three years), and RJio’s by +110bps to 42.5% (vs +690bps to 41.4%).

We have noticed two data points on 5G [moderation in 5G rollout by front-running countries, and completion of 65% of 5G rollout by Reliance Jio (RJio)], which form the basis of this report. The two data points increase our conviction that the 5G rollout
in India will likely decelerate from FY25 onwards.

India's total wireless subscriber base increased marginally MoM by 0.7 lakh subscribers on a net basis, reaching 114 crore in May.

Reliance Jio and Bharti Airtel experienced subscriber gains, while Vodafone Idea and BSNL continued to lose subscribers.

The Telecom Regulatory Authority of India (TRAI) has released its data on subscribers (subs) for May’23. Industry-wide active sub base rose 5mn MoM (vs rise of 4.2mn in Apr’23 and rise of 3.6mn average in past six months) with Bharti Airtel (Bharti) adding 2.4mn subs (vs 2mn in past six months).

Reliance Jio Infocomm’s (RJio) revenue grew 9.9% YoY, helped by rise in mobile subs base, faster growth in FTTH and higher enterprise (incl. ILD) revenue. EBITDA was up 14.7% YoY, aided by lower SUC (which added to EBITDA growth by 4.2% YoY).

India has made significant progress in the telecommunications sector, bringing connectivity to a significant portion of its population. While old challenges persist in many parts of rural India, access to healthcare and reliable electricity, the majority of rural communities now have telecom services.