Vodafone, Bharti Airtel and Idea gained 91 percent of incremental market share: Report
By insightVAS - Thu Jun 13, 4:13 pm
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The news source reported, over the past year, the incumbent telecom operators, Vodafone, Idea Cellular and Bharti Airtel have continued to gain market share in terms of revenue, according to analysts at Credit Suisse. The three telecom operators together have garnered 91 percent of the incremental market share in the past 12 months, much higher than their current market share of 69 percent in the quarter ended March 2013.
The incumbents continue to gain market share at the expense of smaller players, Sunil Tirumalai, research analyst from the Swiss broking firm, said in a note to clients accessed by the news source.
Bharti’s revenue market share increased to 29.9 percent in the quarter ended March 2013 from 29.2 percent in the March 2012 quarter. Similarly, market share for Idea Cellular and Vodafone India have increased to 15.7 percent from 15 percent and to 23 percent from 22.7 percent, respectively, in the same period.
“Over the past 12 months, Bharti has accounted for 40% of the incremental revenue market share versus its end of period (EOP) market share of 29.9% for the March 2013 quarter. Similarly, Idea and Vodafone have 25% and 27%, respectively, of the incremental market share over the past 12 months. This further corroborates the argument that the market is consolidating with the top three players,” Tirumalai said.
Bharti accounted for 40 percent of incremental industry revenues in the past 12 months compared to its EOP market share of 29.9 percent. This trend of garnering more than its fair share of revenues has been true for the past three quarters, he added. Incremental market share of a company is the portion of increase in the revenues of the industry that accrue to the company. This can be different from the current market share. If incremental market share is higher than the current market share, then the current revenue market share should go up with time.
Credit Suisse argued that Bharti had lost market share in the fourth quarter by 50 basis points compared to the third quarter ‘due to seasonality in Bharti’s reporting pattern’. The analyst said that Bharti normally sees a sharp drop in market share in March every year, and sees a sharp increase in June.
Given this anomaly, the year-on-year numbers rightly ascertain Bharti’s performance that Bharti has gained 70 basis points in market share over last year.
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