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Consumer spending on mobile services rises 20% in June quarter on tariff hikes

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Consumer spend on mobile phone services increased 20% on year to 47,800 crore in the quarter ended 30 June, data from sector regulator Trai showed, largely due to the tariff hikes introduced by telcos in November 2021.

Trai’s quarterly performance indicator reports come with a lag. Leading carriers have reported their results for the quarter ended September earlier this month.

An increase in data usage across the consumer base combined with a rise in the number of 4G users to 752 million also helped, despite a fall in talktime minutes. Higher revenues have led to higher average revenue per user (Arpus) for telcos.

“Inter-company settlement reduced 26% on-quarter, which has increased net revenue faster versus consumer spend. Arpu (based on consumer spend) rose 3.2% on-quarter and 23.8% on-year to 139 ( 170 including GST) benefiting from price increase taken in Dec’21, and additional day in the quarter,” said analysts at ICICI Securities. For the quarter ended June 2021, the Arpu was 112. Consumer spending comes to 1.91 trillion for FY23, analysts said.

Net revenue, derived after removing inter-company settlement amounts, comes to 45,860 crore for the quarter ended June, of which the prepaid segment contributed 89.5% and postpaid 10.5%. Prepaid customers form about 95% of the telcos’ entire customer base of over 1.14 billion users.

Postpaid revenue increased to 33% 4,820 crore on the back of increased subscribers while prepaid revenue rose 22.7% to 41,040 crore for the industry in the quarter ended June, versus the same quarter in the previous financial year.

The positive growth also reflected in Arpus for the prepaid segment rising to 30.2% on-year 129. But postpaid Arpu declined to 8.3% 198 on-year, in the same comparison period.

Reliance Jio, the country’s largest telecom services provider, benefitted the most from the expanding 4G sub-base as it added 24bps to its share of subscriber market share in the quarter ended June, raising it to 54.9%. Bharti Airtel improved its share by 12bps to 27.3%. Vodafone Idea’s 4G subscriber market share dipped 16bps to 15.8%. As of June 2022, Jio had 413 million 4G subscribers, followed by Airtel with 205 million subscribers and Vodafone Idea with 119 million 4G subscribers.

Consequently, data usage market shares for telcos have also risen, with Jio having the highest share of 55%, followed by Airtel and Vodafone Idea at 33.4% and 14.4% shares.

Industry-wide, 3G subs continued to decline and were down 1.9 million to 19 million as telcos continue to shut down 3G sites and move subscribers to 4G networks. The 3G data volume was down 5.3% on-quarter, while the 2G data volume dipped 4.7% on-quarter.

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