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Telecom Market Leaders Grow Stronger, Challengers Get Weaker

Market trends showed that the dominant players continued to grow stronger while challengers got weaker, according to a Kotak Institutional Equities note on the telecom industry

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India's top three telecom service providers garnered a 110 per cent share of the sector's incremental gross revenue in the financial year 2016, dominated by Bharti Airtel and Idea Cellular.

Market trends showed that the dominant players continued to grow stronger while challengers got weaker, according to a Kotak Institutional Equities note on the telecom industry.

The market share consolidation theme continued in the March 2016 quarter with the top three operators continuing to tighten their grip on the market while the challengers continue to lose theirs, it said.

"Bharti and Idea, in particular, have performed exceedingly well gaining close to 90% of incremental revenues in FY2016 as compared to around 60% in FY2015 and FY2014," Kotak Institutional Equities noted.

Idea's in-market execution continued to be exemplary, in sharp contrast to its stock performance, and incumbents continued to gain greater market share in their 3G circles.

Idea's gross revenue market share for the year increased to 18.9 per cent as compared to 17.5 per cent in financial year 2015, while Bharti's increased to 31.5 per cent from 30.7 per cent in financial year 2015.

The top 3 operators accounted for 110 per cent of the industry's incremental gross revenue in financial year 2016 compared to the previous year, whereas the figure for financial years 2014 and 2015 stood at 91.2 per cent and 86.3 per cent respectively.