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Published on 18/06/2022 10:01:26 AM | Source: Emkay Global Financial Services Ltd

Telecom Sector Update - April ’22: Sharp fall in VLR subscriber base By Emkay Global

Posted in Broking Firm Views - Sector Report| #Telecom Sector #Emkay Global Financial Services Ltd. #Sector Report

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* After four consecutive months of growth, the industry saw its VLR subscriber base decline by 7.5mn MoM in April. The fall in VLR base was due to Bharti and VIL, whose bases contracted by 3.1mn and 3.8mn, respectively. Jio’s VLR base was flat

* The overall subscriber base inched up by 0.6mn and was similar to the previous month as Jio added the highest number of subscribers at 1.7mn, while Bharti added 0.8mn. VIL’s woes continued, with the telco losing a further 1.6mn subscribers.

* Wireless broadband additions were also weak, with only Jio managing to add subscribers (1.7mn) in April. Bharti lost 0.3mn wireless broadband subscribers, while VIL lost 0.4mn. Both Jio and Bharti added record wireline subscribers in Apr’22.

* Jio was also the only operator to add rural and urban subscribers, while VIL lost subscribers on both fronts. The weak subscriber addition trends can be attributed to the Nov’21 tariff hikes and higher smartphone inflation.

 

The overall subscriber base expanded by 0.6mn, similar to the last month. And, Jio reclaimed its top position in subscriber additions. With two consecutive months of subscriber additions, Jio’s SIM consolidation and clean-up of inactive subscribers seems to be over, in line with the management’s guidance in the previous quarter. The VLR proportion saw a decline for all players, resulting in a sharp 7.5mn decline in the VLR subscriber base. Bharti and VIL saw declines of 3.1mn and 3.8mn, respectively, from the prior month. For Bharti, this was highest decline in its VLR subscriber base in the last eleven months. Jio’s VLR base remained flat in April.

Broadband subscriber base: Jio was the only operator to add wireless broadband subscribers in the month. After steady additions in the last couple of months, Bharti lost 0.3mn wireless broadband subscribers in April, while VIL lost 0.4mn. Jio continued with its winning streak in wireline broadband subscriber additions, with the addition of 0.4mn subscribers. Bharti stood closely behind with 0.3mn. Jio now has 5.6mn wireline subscribers while Bharti has 4.9mn.

Urban-rural mix: Jio was the only operator to see additions in both urban and rural subscribers, while the mix for all operators remained stable. Bharti saw a marginal decline in its urban subscriber base, while VIL lost both urban and rural subscribers. Jio continued to have the highest urban subscribers at 56%, followed by Bharti (52%) and VIL (50%).

Player-wise analysis

Bharti Airtel: Bharti added 0.8mn subscribers, while its VLR base fell by 3.1mn as its VLR proportion declined to 85.8% in Apr’22 from 86.7% in Mar’22. The decline in VLR subscribers was contributed by Punjab, Maharashtra and Uttar Pradesh (W) circles, while Bihar saw an increase in VLR subscribers.

Jio: The overall subscriber base rose by 1.7mn in Apr’22 vs. 1.3mn increase in Mar’22. The VLR subscriber base was flat MoM, as the VLR proportion fell slightly. The company’s VLR subscriber market share increased further to 37.4%, ahead of all other operators. Jio’s VLR subscriber base witnessed a decline in Uttar Pradesh (W), Maharashtra, Mumbai, Gujarat and Tamil Nadu circles, while it increased in Uttar Pradesh (E), Madhya Pradesh and Assam circles.

Vodafone Idea: VIL’s subscriber losses continued, with the telco losing a further 1.6mn subscribers. The contraction in VLR proportion led to a further decline of 3.8mn VLR subscribers. After adding VLR subscribers for the first time since its merger in Mar’22, VIL’s base declined again in Apr’22. The Uttar Pradesh (W) circle saw the highest decline in VLR subscribers, followed by Maharashtra, Tamil Nadu and Madhya Pradesh. VIL did not see any meaningful addition to its VLR subscriber base in any of the circles it operates in.

 

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