KOLKATA: India's telecom industry is slated to grow at 4% CAGR over FY16-19 to $33 billion (Rs 2.2 trillion approx), driven by a sharp 30% CAGR spurt in data revenues at $11 billion (Rs 75,600 crore), said brokerage CLSA, adding that Bharti Airtel is best positioned to withstand competition from Reliance Jio Infocomm and gain revenue share with its mix of "incumbency, improved execution, bigger capacity spectrum holdings and a headstart over closest rivals, Vodafone India and Idea Cellular on both 4G capex investments and data network rollouts".
The global brokerage, in fact, said No 2 carrier, Vodafone India and third-largest, Idea Cellular "are at risk of losing (market) share", due to their comparatively limited data spectrum holdings.
On the contrary, it sees market leader Bharti Airtel delivering 9% (CAGR) Ebitda gains over FY17-19, due to "its spectrum and execution edge".
"Given the accelerated transition towards 4G services, operators with adequate 4G footprint/capacity and lower gearing are favourably placed to gain market share," CLSA said in a note seen by ET.
Industry experts agreed that in an emerging scenario of unlimited voice plans bundled with generous allowances of 3G/4G data, a telco's network capacity would be the biggest driver for market share gains.
Analysts at CLSA also predicted an upsurge in data network capacities being augmented along with rapid network rollouts in calender 2017 by the Big 4 -- Bharti Airtel, Vodafone, Idea and Jio -- using airwaves won in the October 2016 auction.
So much so, it expects Bharti Airtel, Vodafone India and Idea Cellular to collectively increase their 3G/4G sites by 35% in calender 2017, and by as much as 85% to over 4.3 lakh sites by March 2019.
CLSA, however, expects voice revenues (read: voice ARPUs) to decline by 4% CAGR, triggered by an increase in data spends and launch of unlimited voice plans by the three biggest telcos in their bid to combat the bruising impact of Jio's continuing free services.
A senior executive of a leading mobile operator said there could be overall industry ARPU dilution with the adoption of unlimited voice plans and lower realisations from data plans, especially in the high-APRU customer space.
But analysts at CLSA believe such ARPU dilution could be partially offset by increased data usage and expansion in the number of data users.
"We see data ARPUs expanding at 11% CAGR to Rs 128 per month over FY16-19, led by increased usage as the share of 3G/4G customers among overall data subscribers rises," said the brokerage.
The foreign brokerage expects India's data subscriber base to see a "17% CAGR spurt to 522 million by end-March 2019," backed by a "44% jump in data penetration". Of this, the combined base of 3G/4G subscribers is expected to touch 392 million from 200 million now, led by a growing smartphone base and aggressive network rollouts by operators.
Analysts at CLSA also expect India's smartphone user base to grow at 13% CAGR over FY16-19 to nearly 400 million, estimating smartphone penetration at 33% by March 2019.
Within the smartphones category, the brokerage expects the number of 4G handset users to zoom by 90% CAGR to 318 million during the period, especially since the share of 4G phones in incremental handset sales is poised to rise amid the accelerated transition to 4G services by the top operators.
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