MNP status check – gains still small for Jio, incumbents holding their own. Even as the gross port-outs pace has increased for the incumbents in recent months, net port-ins remain in the positive zone. Net MNP gains from the challenger pack are likely mitigating the impact of net MNP loss to Jio. Jio’s net port-ins at cumulative 3.8 mn at end-Oct 2017 remain a tiny proportion of the company’s overall subs base. This makes recharge retention the top KPI for Jio at this point, perhaps; the cost of retention (the sharp recent price cut) does appear high to us.
Cumulative net port-ins – incumbents and Jio the only gainers; Idea still leads the charts
MNP data from TRAI (cumulative port-ins and port-outs from MNP inception in Jan 2011 until end-Oct 2017) shows that the incumbents (Bharti, Vodafone and Idea) and R-Jio are the only net gainers from MNP. Idea tops the chart with 25 mn cumulative net gains, Vodafone is second with 19.4 mn net gains and Bharti the third with 18.4 mn net gains. Other operators put together have lost 66.6 mn net subs with RCOM (net loss of 21.5 mn), TTSL (15 mn) and Aircel (13.1 mn) being the biggest losers. Telenor has seen a net loss of 6.6 mn. BSNL’s net loss of 1.9 mn looks respectable relative to RCOM, TTSL and Aircel. Total cumulative ports stood at 268.2 mn, a monthly porting run-rate of 3.4 mn since the launch of MNP (Jan 2011).
Flow metrics suggest improvement in Bharti’s net MNP gains pace
Even as Bharti still lags Idea and Vodafone on cumulative net MNP gains, it has been the MNP net adds leader in the market since Jio’s launch (9.1 mn net gains since Sep 2016 versus 6 mn for Vodafone and 5.4 mn for Idea). Bharti’s outperformance versus Idea and Vodafone has in fact gained pace in the past few months – between end-Jun 2017 and end-Oct 2017, Bharti gained a net 5 mn subs versus around 2 mn each for Idea and Vodafone. Bharti’s relatively higher aggression in the marketplace and better LTE coverage are reflecting in these gains, in our view. MNP performance of Idea and Vodafone remains respectable; the two are perhaps gaining enough in their respective strong circles to mitigate the losses in the weak ones.
Jio’s net port-in pace has accelerated but the numbers are still insignificant
Jio has seen its net port-in pace increased from around 0.1 mn per month between Sep 2016 and Jun 2017 to around 0.7 mn per month between Jun 2017 and Oct 2017. The contrast between these periods is important to draw. Until end-Mar 2017, Jio’s services were free and the customers did not really have to make a ‘which operator gets my spend’ choice. Once Jio started charging in April 2017, the customer has had to make a choice between similarly priced bundles of Jio and the incumbents. The customer can of course choose to keep spending on both – Jio’s bundled plan and a low-value unbundled recharge of the incumbents. Important aspect here is that Jio’s still low (only 3.8 mn of the total 145 mn subs reported by Jio at end-Oct 2017) port-in numbers suggest that Jio has not yet –
* Become the primary number for a good proportion of its customers. By primary, we mean the mobile number on which the customer gets OTP (one-time password) from her bank, for example! Primary no longer means the SIM that gets a higher share of spends.
* Been able to get a large number of its customers to stop spending completely with the incumbents. This gives incumbents a chance to regain the lost spends by capturing the next bundled recharge. Incumbents seeing some success here could be the reason behind Jio’s latest price-cut move.
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