Telecom | Update
Sector Update | 9 May 2020
Telecom
Our earlier telecom update
Subscriber additions turn positive once again
Bharti/RJio see healthy MBB adds, VIL still losing
The Telecom Regulatory Authority of India (TRAI) has released subscriber data for Jan’20.
Here are the key insights:
After last month’s decline in subscribers across the industry, driven by ARPU hikes,
subscriber adds turned positive once again. The gross subscriber base increased by
4.9m (v/s a 3.2m drop in Dec’19) to 1,156m, led by the addition of 0.9m/6.6m by
Bharti/RJio, partially offset by decline of 3.6m in VIL’s subscriber base. Furthermore,
the active subscriber base increased by 3.8m (v/s 3.5m in Dec’19) to 986.3m, led by
the healthy addition of 4.9m customers by RJio. On the contrary, both Bharti/VIL lost
1.7m/0.3m of their active subscriber base.
Bharti gained 0.9m gross subscribers (328m in total), while it lost 1.7m of its active
subscriber base (313m in total). Despite losing active subscribers, Bharti has continued
to maintain its top spot in terms of active subscriber market share with 31.7%.
VIL’s gross/active subscriber base continued to decline by 3.6m/0.3m to 329m/297m;
however, the pace of decline in the active subscriber base slowed significantly (3.1m in
Nov’19 and 1.1m in Dec’19). Subsequently, VIL’s gross/active subscriber market share
fell to 28.5%/30.1% (v/s 28.9%/30.3% in Dec’19).
RJio continued to add the most subscribers, with 6.6m gross and 4.9m active
subscriber additions (v/s 3m in Dec’19). However, the pace of subscriber adds is
gradually slowing from the peak of 12–14m and average of 8–10m earlier. It reached
32.6% of gross market share, retaining its top position.
Industry MBB subscriber adds returned to a healthy 10.4m (v/s 0.9m decline in Dec’19)
to 637m, after witnessing the impact of a price hike during the month. Currently, MBB
subscribers account for 64.6% (+80bp MoM) of the total active subscribers in the
market.
Bharti/RJio added 4.4m/6.6m MBB subscribers (v/s 0.5m/0.1m in Dec’19), while VIL
lost 0.5m (v/s 1.4m in Dec’19), indicating both Bharti and RJio continued their previous
trend of MBB subscriber adds. Bharti/RJio’s MBB subscriber market share improved
30bp/10bp MoM to 22.3%/59.1%, whereas that of VIL further declined to 18.5% (-
40bp MoM). Of the 6.6m MBB adds by RJio, we believe a higher proportion would be
for Jiophone; thus, excluding Jiophone, Bharti would lead in MBB adds.
Subscriber additions turn positive
After last month’s decline in subscribers across the industry, driven by ARPU hikes,
subscriber adds turned positive once again. The gross subscriber base increased by
4.9m to 1,156m, thus returning to the previous trend of 3–4m subscriber additions
monthly. Bharti/RJio’s gross subscriber base increased 0.9m/6.6m (v/s 0m/0.1m) to
328m/377m, while VIL lost 3.6m of its gross subscribers.
Active subscriber additions rose 3.8m in Jan’20 (v/s 3.5m in Dec’19) to 986m.
Growth in active subscribers has been driven single-handedly by RJio, which
reported subscriber additions of 4.9m, partially offset by Bharti/VIL’s subscriber loss
of 1.7m/0.3m. The loss of Bharti’s subscriber base came as a surprise to us as the
company’s focus is on adding quality customers. Although VIL has continued to
Research Analyst: Aliasgar Shakir
(Aliasgar.Shakir@motilaloswal.com); +91 22 6129 1565
Suhel Shaikh
(Suhel.Ahmad@MotilalOswal.com); +91 22 5036 2611;
Anshul Aggarwal
(Anshul.Aggarwal@motilaloswal.com); +91 22 5036 2511
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.