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Subs trend: Jio’s VLR weakness yet to be arrested

* Subscriber additions for the industry in Feb’21 stood at 8.3mn - the highest since Oct’19 - on improved additions from Jio and a marginally positive print from VIL. On the other hand, Bharti’s net adds were healthy at 3.7mn (although moderated mom).

* VLR subscriber base for the industry saw 3.2mn additions, with Bharti adding 3.7mn while Jio and VIL losing marginally. Bharti’s data subscriber base expanded to 53.2% (+115bps since Dec’20), with 9mn adds in Jan and Feb. We estimate total adds of 13mn for Q4.

* With 4.3mn net adds, it was finally a month of improvement for Jio. But the drop in VLR proportion to 78.2% vs. average of 79% in last ten months and widening of the difference between VLR and total subs base to an all-time high of 91mn are concerning.

* Jio’s reported subscriber base points to a strong rebound in March on the net adds front, which can be attributable to its renewed aggression with the JioPhone plans launched in Feb-end. At 11.7mn, MNP requests for industry was the highest since Mar’18.

Subscriber additions for the industry in Feb stood at 8.3mn - the highest since Oct’19. This was driven by turnaround for VIL and rebound from Jio. However, VLR adds were stable at 3.2mn vs. 3.3mn in the previous month. MNP requests for Feb surprised and stood at 11.7mn - the highest since Mar’18.

Broadband subscriber base:

Wireless broadband subscriber base for the industry grew 1%. It was a healthy month for Jio, with 4.3mn adds - the highest since Jun’20. On the other hand, Bharti’s additions decelerated at 3.5mn adds vs. an average 4.8mn additions in the last six months. VIL’s adds of 0.6mn also saw a sequential decline. On the wired broadband front, Jio led the pack once again with 8% mom growth, taking its share among top-5 players to 16% from 14% in Jan.

Urban-Rural subscriber mix:

VIL posted a reduction in its rural subscriber base for the ninth month in a row, while Bharti and Jio continued to see its rural subscriber base inching up. That said, VIL still has the largest share of rural subscribers at 53.1% vs. 47.3% of Bharti and 42.3% of Jio.

Player-wise analysis

Bharti Airtel:

It was another healthy month for Bharti, with its VLR subscriber share further expanding to 35% (+30bps mom). The telco also held the top position in VLR market share for the third month in a row. After outpacing Jio for the last six months on the net subscriber addition front, Bharti saw some moderation with additions of 3.7mn vs. 4.3mn of Jio. Wireless broadband subscriber adds were also healthy and stood at 3.5mn. Bharti’s wireless broadband subscriber % improved to 53.2% from 52.7% in Jan. With an impressive 9.6mn subscriber additions in Jan and Feb, Bharti will certainly manage to surpass our Q4FY21 subscriber addition assumption of 10mn.

Jio:

After a few months that saw volatile and weak additions, Jio added 4.3mn subscribers vs. its six-month average of 1.7mn. However, the VLR print remained unimpressive at a 0.2mn loss although the loss narrowed in comparison with 3.4mn loss recorded in Jan. Jio’s VLR subscriber proportion fell to one of the lowest levels of 78.2% which it saw the last time in Jun’20. The gap between net subscriber base and VLR base expanded to an all-time high of 91mn vs. last 10-month average of 85mn. In Gujarat, Madhya Pradesh and Rajasthan, Jio saw a cumulative loss of 2mn VLR subs.

Vodafone-Idea:

The telco recorded subscriber addition of 0.7mn in Feb, with VLR loss decelerating sequentially to 0.2mn subs. The Uttar Pradesh (E & W) circle saw VLR loss of 0.9mn subs, while West Bengal saw 0.4mn adds. Across other circles, VLR subs movement was largely stable on a sequential basis.

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