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Bharti’s under-performance may not sustain

The Telecom Regulatory Authority of India (TRAI) has released its monthly data on subscribers (subs) for May’21. Industry-active subs dipped 11.2mn with Bharti Airtel’s (Bharti) net dipping 5.6mn, which is disappointing; Reliance Jio’s (RJio) net add stood at 2.8mn from aggressive offer on JioPhone. Industry-wide mobile broadband (MBB) subs dipped 2.3mn with Bharti’s decline of 1.5mn, which is also disappointing. Bharti’s MBB subs market share dipped 9bps to 28.5% on active basis, while RJio’s improved 66bps to 50.9%.

MNP has dipped slightly, but remains elevated at 7.3mn with MNP churn rate at 0.6%. Wired broadband subs adds was same for RJio at 0.2mn while Bharti’s slowed to 0.05mn (vs 0.1mn in April’21). Bharti subs add to bounce back as it has taken tariff hikes in various plans including base pack of Rs49 which would have not been possible with continued slippage in subs.

Industry-active subs dip 11.2mn; impacted by lockdown on second covid wave

* Industry-active subs base dipped by 11.2mn to 986mn (down 1.1% MoM, up 2.6% YoY), which was impacted from lockdown but to second covid wave on SIM consolidation, delay in recharges and shift to JioPhone.

* RJio’s active subs base grew 2.8mn to 338mn in May’21, which is commendable and likely grabbed low-end subs from Bharti / VIL from aggressive pricing on JioPhone.

* Bharti’s active subs dipped 5.6mn to 341mn and total subs dipped 4.6mn in May’21 which is disappointing. Bharti has been able to hold to competition from RJio for the past few quarters. It is likely to bounce back to healthy subs adds from June’21 as we believe it would not have taken tariff hike in base pack if it continued to see slippage in subs base.

* VIL’s active subs dipped 7.0mn to 247mn in May’21. Total subs shrunk 4.3mn which is disappointing as it will become difficult for VIL if subs slippage sustains.

* RJio’s active subs market share improved by 67bps to 34.3% MoM, while Bharti’s stood at 34.6% (down 18bps MoM) and VIL’s dipped 42bps MoM to 25.4%. Bharti still maintained lead in active subs market share.

Industry MBB (mobile broadband) subs dipped 2.3mn

* Industry-wide MBB subs dipped 2.3mn to 758mn in May’21. Bharti lose 1.5mn MBB subs which is disappointing (it had average 4.2mn net add in past 10 months).

* RJio’s MBB subs base grew by 3.7mn to 431mn. Adjusted for inactive subs, its MBB market share stood at 50.9% (up 66bps MoM), while Bharti’s was 28.5% (down 9bps MoM) and VIL’s 18.0% (down 35bps MoM).

* VIL’s MBB subs base shrunk 2.9mn, which is disappointing, to 120mn.

RJio’s wired broadband subs add was steady at 0.2mn to 3.0mn

* Wired broadband subs was up by 0.32mn MoM to 22.7mn (1.4% MoM / 17.3% YoY) in May’21. Net add for Bharti slowed to 0.05mn (vs average 0.8mn in past 8 months).

* RJio’s market share improved to 13.2% (up 70bps MoM), and net add stood at steady 0.2mn. Bharti’s market share was 14.2% (up 2bps MoM). BSNL’s subs was flattish 6mn and market share was down to 26.5% (down 38bps MoM).

Industry MNP churn rate dipped to 0.6%

* Industry porting slightly decreased to 7.3mn in May’21. MNP churn rate dipped to 0.6% (vs 1% in past three months).

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