RJio becomes second largest telco by revenue, adds most subscribers in June

Reliance Jio Infocomm, a Mukesh Ambani-owned telecommunication service provider, has surpassed Vodafone India to become India’s second largest telecom operator by revenue market share, according to a report on financial data released by the Telecom Regulatory Authority of India (Trai) for the second quarter of 2018.

A recent report by Crisil also highlighted that the profits of the top three incumbent telecom firms - Airtel, Idea and Vodafone - have halved in the past three years with a 1,000 bps plunge in operating margins, and a recovery is seen only from FY20 when consolidation in the industry is complete.

The corrosive effect of the competition, which began after Reliance Jio entered the fray in September 2016, will see gross revenue of the top three incumbents plunging by 14-16 per cent this financial year as they are forced to focus on retaining subscriber base, added the Crisil report.

Bharti Airtel, Idea Cellular, Tata Comm hit 52-week lows

Shares of telecom services providers (telcos) are under pressure with all major listed stocks – Bharti Airtel, Idea Cellular and Tata Communications – hitting their respective 52-week lows on the BSE, on concerns of weak earning in June quarter (Q1FY19).
Idea Cellular (down 6% to Rs 49.50), Tata Communications (5% at Rs 543) and Bharti Airtel (3% at Rs 331) were down in the range of 3% to 6%, as compared to 0.32% rise in the S&P BSE Sensex at 11:17 am.

In past one month, these three stocks have fallen in the range of 10% to 20% against 3% rise in the benchmark index.

According to Motilal Oswal Securities, the spillover of the fresh round of undercutting by operators from 4QFY18 to 1QFY19 continued to take a toll on telcos’ revenue.

Further, consolidation in the telecom sector had fuelled the exit of tenancies, leading to higher tenancy cost per operator. This, coupled with installation of cell sites on fresh towers (non-loading) and soaring diesel prices, is expected to increase the QoQ network cost for all operators, the brokerage firm said in Q1FY19 results preview.

DoT may approve merger of Vodafone, Idea Cellular in the next few days

The department of telecommunications (DoT) is likely to approve the merger of Vodafone and Idea Cellular in the next few days, making the combined entity the country’s largest mobile services operator.

Sources said all the wings of the DoT as well as Telecom Secretary Aruna Sundararajan had given a go-ahead to the merger. After signature by Communications Minister Manoj Sinha, the approval document will be sent to the companies.

The sources further said neither company would have to pay big sums to the government as most dues, including licence fees and spectrum charges, were under litigation.

“Dues under judicial intervention cannot be sought by the government. Only the ongoing dues need to be paid by the companies at the time of merger,” a source in DoT said.

The source added that although one-time spectrum charges had also been stayed, Idea Cellular, the acquirer, would have to furnish a bank guarantee for this charge in accordance with the merger and acquisition guidelines. One-time spectrum charges for Idea Cellular stand in the range of Rs 20-25 billion. Idea is likely to contest the bank guarantee demand by the DoT. Ongoing dues, which include penalties and other minor charges, are just a few billion rupees, which will be paid at the time of merger.

HCC, Siemens, Mahanagar Gas, Suzlon Energy, Idea Cellular hit 52-week lows

Hindustan Construction Company (HCC), Mahanagar Gas, Suzlon Energy, Idea Cellular, Vakrangee and PC Jeweller among 21 stocks from the S&P BSE500 index hitting 52-week lows on the BSE.
Bharat Electronics, Chennai Petroleum Corporation Limited (CPCL), DCM Shriram, Allcargo Logistics, Siemens, Sintex Industries, Uco Bank and Syndicate Bank were among 22 stocks from the index too hit 52-week lows today.

HCC has plunged 24% to Rs 17.75 on the BSE in intra-day trade on back of heavy volumes after the media report suggested that the Lavasa auditor raises concerns regarding its debt situation.

The MARKET said the Exchange has sought clarification from Hindustan Construction Company Ltd on May 03, 2018 with reference to news appeared in CNBC TV18 dated May 03, 2018 quoting "Lavasa networth worries: Auditor says significant doubts about ability of co to continue as going concern." The reply is awaited.

At 10:56 am; the stock was trading 17% lower at Rs 19.30 on back of an over six-fold jump in trading volumes. A combined 31.94 million shares changed hands on the counter on the BSE and NSE so far.

Idea Cellular up 9% on preferential issue to promoter group

Idea Cellular soared 9% to Rs 114 on BSE after the board approved fund raising of up to Rs 3,250 crore through issue of shares to promoter group companies via preferential issue at Rs 99.50 per share.

“In the first tranche, the company will raise Rs 3,250 crore by issuing around 326.6 million preferential shares at Rs 99.50 a unit to four entities of the promoter group — Birla TMT Holdings Pvt Ltd, Elaine Investments Pte Ltd (Singapore), Oriana Investments Pte Ltd (Singapore) and Surya Kiran Investments Pte Ltd (Singapore) — subject to regulatory approvals,” Idea Cellular said in a regulatory filing.

The board has also approved convening of an extraordinary general meeting of the company on Tuesday, January 30, 2018, inter alia to approve the issue of preferential issue of equity shares to the proposed allottees on a preferential basis, it added.

Additionally, the board has formed a committee that would evaluate the best option, including a further preferential issue, qualified institutions placement, rights issue etc, for raising another Rs 3,500 crore of equity.

Kumar Mangalam Birla, chairman, Idea Cellular, said: “The AB group is in the process of creating a large digital infrastructure, and to contribute significantly towards fulfilment of the Digital India vision. At a time when the telecom industry is going through a challenging environment, the equity infusion by the group in Idea is another step towards reinforcing the group’s commitment (towards telecom business).”

The trading volumes on the counter nearly doubled with a combined 27.28 million shares changed hands on the NSE and BSE till 10:02 AM.

Idea Cellular erases initial losses to gain even after poor Q1 results

STOCK MARKET - Idea Cellular pared initial losses to gain as much as 2.1% on value buying after the company on Thursday posted a loss of Rs 815.9 crore in the first quarter ended June 30, missing estimates as Reliance Jio triggered a price war in the Indian mobile telephony market.

The company had reported a net profit of Rs 217.1 crore in the corresponding quarter last year. This is the company’s its third net loss in succession. Revenue for India’s No. 3 mobile phone operator also fell nearly 14% on year to Rs 8,166.5 crore.

Idea attributed the steep decline in voice and mobile data realisations to the aggressive tariff led by unlimited voice and data bundle plans. “However, the fall in realisation rate was largely compensated by a substantial volume growth,” it said.

The scrip lost as much as 5.4% in the early morning trade but later erased initial losses and was trading 0.7% higher at Rs 90.30 at 12.47 pm (IST). On the other hand, Sensex was down 0.57 per cent at 32,198.

Shares of the company had hit their fresh 52-week high of Rs 123.75 on March 20, 2017 and 52-week low of Rs 66 on November 9, 2016.

Idea ended June with 189 million users, compared with 189.5 million it had at the end of March.

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Idea Cellular surges 7% after CCI approved merger with Vodafone

STOCK MARKET - Idea Cellular surged 7% to Rs 98.30 on BSE on back of heavy volumes after the Competition Commission of India (CCI) on Monday approved the merger with Vodafone India.

“The company is pleased to confirm receipt of the letter from the Competition Commission of India dated 24th July 2017, according approval to the proposed merger of Vodafone India, Vodafone Mobile Services Limited, and Idea Cellular under sub section (1) of section 31 of the Act,” Idea Cellular said in a BSE filing.

The transaction is expected to close during calendar year 2018 subject to customary approvals, it added.

Post the transaction, Vodafone will own 45.1% stake in the merged entity while the Aditya Birla group, Idea's parent, will have 26% shareholding after paying Rs 3,874 crore cash for a 4.9% stake. The remaining 28.9% will be held by other shareholders.

“This landmark combination will enable the Aditya Birla Group to create a high quality digital infrastructure that will transition the India population towards a digital lifestyle and make the Government’s Digital India vision a reality,” said Aditya Birla Group Chairman, Kumar Mangalam Birla, while announcement of merger.

Till 12:12 pm; a combined 26.87 million shares changed hands on the counter on BSE and NSE.

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Reliance Jio beats Idea, Airtel with almost double 4G download speed: Trai

Amid a tussle between leading telecom firms over broadband speed, data published by telecom regulator Trai shows that Reliance Jio tops the chart with almost double the download speed of those offered by its nearest rivals — Idea Cellular and Airtel.

The monthly average mobile broadband speed data published by the Telecom Regulatory Authority of India (Trai) for February shows that the download speed on Jio network declined marginally to 16.48 mbps from 17.42 mbps in January but it still remained the fastest network during the month.

At this speed, a user can download a movie in less than five minutes.

The speed of Jio was almost double of its nearest rivals Idea Cellular (8.33 mbps) and Airtel (7.66 mbps).

According to Trai data, there have been a marginal decline in download speed of Idea and Airtel as well compared to their performance in January.

Among other networks, download speed on Vodafone and BSNL also dipped marginally to 5.66 mbps and 2.01 mbps from 6.13 mbps and 2.89 mbps, respectively.

The data showed average download speed on Reliance Communications, Tata Docomo and Aircel network at the end of February was 2.67 mbps, 2.52 mbps and 2.01 mbps respectively.

Average download speeds of other networks were not available.

Trai collects and computes speed of mobile data from subscribers across the country with the help of MySpeed application on real-time basis.(READ MORE)

Price wars: Reliance Jio versus the rest in telecom battle

Breaking News - For a sector seeing double-digit revenue growth over recent years, FY16 marked a reversal. At Rs 2 lakh crore, the sector grew by six% ; it was nearly double this in FY11-15. Revenue growth for the September was only 4.3% over the year-ago period.

What is hurting the sector, riding high on strong voice growth and robust subscriber addition, is intense competition over the past 18 months. What has aggravated this is the entry of Reliance Jio (RJio), offering free voice and data services, from September. Despite reduction in the number of operators in the recent mergers of Reliance Communications-Aircel and Airtel acquiring spectrum from Videocon, competitive intensity remains high.

Amid all this, the top three have consolidated their market shares and now account for 75% of the overall revenue pie. The September quarter number is up 200 basis points (bps) over the year-before period.
In fact, Bharti’s market share at 33% is at a seven-year high. Among the others, Vodafonehas held on to its share of about 23.4%; Idea Cellular has slid. Revenue market share for Idea was down 50 bps year-on-year in the September quarter to 18.7%, partly attributable to its decision to raise prices in the March quarter.(Read More)