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Published on 31/07/2021 12:03:14 PM | Source: Motilal Oswal Financial Services Ltd

Telecom Sector Update - Subscriber run-rate hit by second COVID wave led lockdown By Motilal Oswal

Posted in Broking Firm Views - Sector Report| #Telecom Sector #Sector Report #Motilal Oswal Financial Services Ltd

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Subscriber run-rate hit by second COVID wave led lockdown

RJio gained due to its higher promotional offers; recovery in sight

The Telecom Regulatory Authority of India (TRAI) has released data for May’21.

Here are the key highlights:

* The industry subscriber base saw the impact of regional lockdowns in India due to the second COVID wave – many customers faced both financial and physical challenges in recharging their SIM cards. Subsequently, gross/active subscribers declined by 6.3m/11.3m. However, compared with the nationwide lockdown during the first COVID wave, the impact of the second COVID wave led lockdowns is lower – evident from the subscriber decline of 31m in Apr’20.

* RJio was the only telco to report an increase in monthly gross/active subscribers, while both Bharti/VIL saw decline in subscribers.

* RJio added 50bp/70bp market share with an increase of 3.6m/2.8m monthly gross/active subscribers to 431m/338m. This could be attributed to extended validity, offers such as ‘buy one get one free recharge’, free talk time, and emergency data loans to keep subscribers active even if they were unable to recharge. Nevertheless, the pace of additions slowed from 7.4m/3.5m active adds in March/April’21.

* Bharti saw gross/active subscriber decline of 4.6m/5.7m to 348m/341m, a big drop from its monthly run-rate of 4m in the past 9–10 months. Bharti also provided free validity, but for just one month and only to a limited set of feature phone subscribers. 4G subscribers also declined by 1.5m to 189m. Our channel checks suggest it has largely recovered from the lockdown impact; since the lifting of the lockdown, it has seen a steady run-rate of subscriber adds.

* VIL saw a gross/active subscriber decline by 4.3m/7.1m to 278m/247m. Barring a couple of months of increase, it has consistently declined over the last 2–3 years. 4G subscribers also declined by 2.9m.

* Industry 4G subscribers declined by 2.9m to reach 757m, with 4G subscribers accounting for 76.8% of active subscribers.

* RJio was the only player to report 4G subscriber additions of 3.6m, possibly from JioPhone, albeit at a slower pace v/s the last two months. Bharti/VIL’s 4G subscribers declined by 1.5m/2.9m.

* Industry Wired Broadband subscribers remained positive with 0.3m adds to 22.7m. RJio continued its steady 0.2m run-rate – the highest in the industry, but a far cry from its ambitious targets. Bharti / Smaller players added about 500k/800k subscribers.

 

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