Jio’s free offers throw Airtel, Vodafone and Idea in dark pit of falling revenues

India's leading telecom companies, Bharti Airtel, Vodafone India and Idea Cellular, have all reported sharp and consistent drops in their adjusted gross revenue (AGR) in the quarter ending March, thanks to free voice and data services from new rival Reliance Jio Infocomm.

Bharti Airtel, which is India’s number 1 telco, had its AGR down by 9.9% to stand at Rs 10,400 crore, while Vodafone India and Idea Cellular saw a drop of 12.6% and 8%, reporting AGRs at Rs 7,300 crore and Rs 6,400 crore, respectively.

The same has been published by ICICI Securities said, after analysing data provided by the Telecom Regulatory Authority of India (TRAI).

AGR has dropped "nearly 22% on-year and 14% sequentially to Rs 29,700 crore in the March quarter on intense competitive pressure unleashed by Jio," said Sanjesh Jain, research analyst at ICICI Securities, in a note directed to clients.

TRAI is all set to hold a meeting with the heads of these telcos this month so that the rising financial stress in the telecom sector can be discussed and probable solutions can be thought out.

Post that meeting, telecom minister Manoj Sinha is also supposed to meet the promoters of the phone companies on June 22-23 to discuss the crisis.

Despite fall in AGRs, these incumbent telecoms have registered on-year gains in their respective AGR market shares in the March quarter.

In the January-March quarter, Bharti Airtel's AGR market share rose 315 basis points (bps) on-year to 34.9%, while for Vodafone and Idea, the rise was of 170 bps and 135 bps to 24.4% and 21.5%, respectively.

One basis point is 0.01 percentage point.

In a separate note, brokerage HSBC said that these three telcos held on to their 75.3% combined revenue market share (RMS) in the March quarter and was unperturbed by Jio's disruptive launch.