Telecom subscriber base resumes growth once again

Indian telecom moving towards higher ARPU regime

MUMBAI/October 18: The telecom industry’s subscriber base posted growth once again in July 2020 after consistently declining for four months with the backing of the two leading players – Reliance Jio and Bharti Airltel.

The telecom subscriber base has been on a free fall for four months ever since the nationwide lockdown was imposed in March.

Priyanka Bansal of India Ratings & Research (Ind-Ra) stated that while RJio and Airtel reported a month-on-month addition of 3.6 million and 3.3 million subscribers, respectively, Vodafone Idea Ltd (VIL) continued to lose subscribers even in July 2020 (down 3.7 million).

The industry-wide revenue (excluding Bharat Sanchar Nigam Ltd {BSNL}) remained almost stable in the first quarter of FY21.

Towards a higher ARPU

The Ind-Ra analysis revealed that the number of broadband subscribers increased to 60 per cent of the overall wireless subscriber base in July 2020 from 59 per cent in June 2020 and 47 per cent March 2019.

In July 2020, the number of broadband subscribers grew by 7 million, attributable to Airtel and RJio. “This along with a rise in data tariffs reflects that the Indian telecom industry is moving towards a higher ARPU (average revenue per user) regime,” said Bansal.

The Ind-Ra report said that data tariffs rose to Rs11.2/GB in Q4, FY20 from Rs8.5/GB in Q3, FY20, as reported by Telecom Regulatory Authority of India (TRAI).

The tariff differentials for the pre-paid and post-paid tariff plans among the telcos are already narrowing down over the past one year, and the recently announced post-paid tariff plans by RJio indicate the inclination of the largest player in the industry towards the same.

RJio is leader while VIL keeps losing

RJio continues to be the largest player in the Indian telecom industry in terms of subscriber market share (SMS) and revenue market share (RMS).

RJio continues to garner share largely at the expense of VIL. RJio holds SMS of 35 per cent in July 2020 and RMS of 38.3 per cent in Q1, FY21.

While Airtel has shown resilience and its overall wireless SMS increased, albeit moderately to 28 per cent in July 2020 from 27.8 per cent in June 2020, VIL continues to lose SMS (July 2020: 26.3 per cent; June 2020: 26.7 per cent).

RJio also had a dominant market share of 58.7 per cent in the broadband segment (as against 16.8 per cent for VIL and 22.7 per cent for BAL), since all of RJio customers are in the broadband category. VIL is losing market share, with the broadband subscriber base as well (July 2020: 16.8 per cent; June 2020: 17.2 per cent).

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