In 2022, telecom service providers are off to a good start. Post-COVID, telcos enacted a powerful recovery in 2021. The growth story continues further in the first quarter of 2022 (1Q22). In this report, we evaluate and summarise the performance of 36 Asia Pacific telcos for 1Q22. (January- March 22).

Across Asia, Indian telcos enjoy a positive first quarter of revenue

• 75% of operators registered positive revenue growth. In 1Q22, 36 telcos cumulatively added new revenues of USD 10.1 billion. Tariff revision for the Indian operators has resulted in healthy revenue growth (Figure 1).

Figure 1: % Revenue change for APAC telcos, 1Q22

Bharti Airtel leads the highest revenue and EBITDA change in the industry. The telco has one clear focus – winning quality customers. Key results from Bharti Airtel include:

1. Mobile revenue growth by 25.1%, added approximately 21 million 4G customers (Y-o-Y) to a total of 200 million customers.
2. Mobile ARPU and data consumption surged by 22.7% and 28.7%, respectively, reaching USD 2.3 (INR 178) and 18.8 GB per user/month.

Jio sets the benchmark for bundling content with fibre services. The fibre-connected homes have grown within two years from 0 to 5.3 million (ending March 2022). In the past year, Jio has driven two-thirds of new home connections throughout the industry. It bundles fibre with

1. 550+ on-demand channels
2. 14+ OTT apps

The Indian telco is creating a world-class partner ecosystem, acing strategic acquisitions.

Figure 2: Reliance Jio strategic investments and joint venture

EBITDA growth of 6.5% in the industry

• Over 70% of operators enjoyed a positive earnings change in 1Q22.

Bharti Airtel

1. Improved operational efficiencies across all segments
2. Increased margins from 48.9% in 1Q21 to 50.8% in 1Q22

Reliance Jio

1. Tariff hike helped drive a positive % EBITDA change

Celcom

1. Revenue growth along with lower OPEX (lower direct and sales & marketing costs)
2. Prepaid and enterprise solutions subsidiaries drive revenue growth

NTT Docomo

1. Integrated cost-efficiency measures to counterbalance the negative revenue change
2. Further reduced network and equipment operation costs

Figure 3: % EBITDA change for APAC telcos, 1Q22

The Russia-Ukraine war, rising inflation and continued impact of COVID-19 cases are key macro-level factors severely impacting the performance of telcos in Thailand. Tourism is a key industry which has yet to return to normal, with its impact still being felt by the Thai telcos. Operators face immense pressure on mobile ARPU. The intense price competition in the connectivity services has also resulted in a fall or near zero growth in the mobile segment.

#3 Telcos slowdown on their spending in 1Q22

1. 45% of the telcos charted a negative change in their CAPEX within 1Q22. We expect the trend to continue throughout the year.
2. Most markets have experienced peak investment cycles in the last 24 months. Additionally, we observe a general trend in CAPEX/non-network savings through co-building and collaboration.
3. Dialog Axiata’s spending increased across the previous quarters incrementally. This increment continued in 1Q22. The spending includes:
   1. investing in the broadband infrastructure to strengthen its leadership in the Sri Lankan broadband market,
   2. and fuelling the core and transport networks, including fibre and 4G capacity upgrades.

Figure 4: % CAPEX change for APAC telcos, 1Q22

#4 Trends in ARPU

1. 5G mobile ARPU is unable to uplift the overall mobile ARPU for the operators in Thailand. They attribute the reduced spending as a result of the surge in Omicron cases and how it has compromised the ARPU.
2. Revenue from roaming services helps improve the ARPU for operators in Singapore.
3. The quarters of 2021 clearly highlighted the benefits of 5G regarding ARPU. China and South Korea, the early bird operators of 5G, have adapted to the current conditions of 5G, and its impact on ARPU has diminished over time.

Figure 5: % Mobile ARPU change for APAC telcos, 1Q22

#5 China Mobile, Bharti Airtel, Reliance Jio, China Telecom and SoftBank ace twimbit’s Growth Index

twimbit’s Growth Index recognise the leaders based on two parameters with an equal weightage to:

• Absolute change in revenue
• Percentage change in revenue

Figure 6: Net addition and % revenue change for top 5 telcos, 1Q22

Compared to the average growth for the 36 telcos (7.5%), the top 5 telcos grew 13.2%. The elements that drive the beating heart within the operations of these top 5 telcos are a customer-centric approach and innovation. For instance, China Mobile consistently delivers an above-market performance despite operating on an immense scale. It ranked first in performance in 2021, continuing strong in 2022.

Figure 7: Recent key updates for top 5 telcos

Telcos start 2022 strong, achieving a commendable performance in 1Q22. Stay tuned for our next update (2Q22). Check out the performance trends in 2021 here.