Top 10 Operators

This would be the last time that V&D could present to you the Top 10 Service Providers’ analysis in the way it has been doing over decades. Reason being, there aren’t now too many players left in the industry. Other than these telecom operators, there is only VSAT service, whose operators could join the list. But, the gap in their revenues and the revenues of telecom operators would be huge.

However, as the operators move towards a transition, and, we see OTT and IoT as new additions in the revenue streams of operators, it could also mean adding new players to the list of Top 10. This would take time though, at least 3 years, where we might see some OTT or IoT operator joining the Top 10 list of telecom service providers. The other probable segment of operators is of MVNOs, but as of today, this story hasn’t picked up yet. It might catch up as IoT and other such services become mainstream and solution companies could take up this route to offer end to end services to the subscribers.

On the face of it, service providers have improved their revenue shares as compared to the previous financial year. However, it is not a sign of them doing great in the sector. There has been 25.4% dip in the total telecom services revenues across segments in the financial year 2017-18, while the Top 10 operators lost 19.7% in their revenues. It is due to this reason, that Top 4 operators have shown a bit of increase in their revenue market shares, which itself advocates for consolidation. The 5th in the row, Jio is a new entrant in the list.

The Top 4 operators lost average 17.4% of their revenues in the financial year 2017-18, as against the bottom 4 players losing whopping 54% in the revenues. This dip in the bottom 4 was also as a result of prolonged M&A and exit process, wherein they continued to lose revenues and could not switch off the networks in compliance with the regulatory mandates.

Airtel, Vodafone, and Idea continued to lead the overall telecom services space followed by state-run BSNL and the challenger brand Jio, which has disrupted everything from technology to business models in the telecom sector of India. The lead maintained by the mobile service operators itself speaks of how dominating the mobile services are in the entire telecommunications services in India, like any other country.

Assuming that all M&As and exits would have completed by the end of the fiscal year 2017-18 and all the revenue of the combined entities would align accordingly, there would have been only 6 operational telecom service players. However, technically it would remain 7 as the fate of Aircel is still not decided. This might still not be the situation we can see at the end of the current fiscal year, i.e., 31st March 2019 as the Vodafone-Idea merger process may not still result in them merging their financials by that period.

Whether the reporting of revenues will continue to be shown as per current entities or in the new combined forms, the reality of the day is that we have a few players in the industry that would have the strength to invest in newer technologies like 5G and lead towards the stability of the sector.