Telecom Sector update : Sharp decline in VLR base; Jio leads in overall sub-additions yet again By Emkay Global Financial Services
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* The telecom industry’s VLR base fell sharply by 4.4mn in Jul-22. VLR base decline was seen across all private operators, with both Bharti and Jio seeing a drop of 1mn each, while VIL saw a 1.7mn fall in its base.
* Jio has added the highest number of overall subscribers for the fourth month in a row, with its base growing by 2.9mn. Bharti added 0.5mn subscribers, while VIL’s subs fell by 1.5mn. The overall industry base grew by 0.6mn.
* Wireless broadband subscriber-addition trends saw Jio leading the pack yet again, with addition of 2.9mn subscribers; Bharti was close at its heels, at 2.6mn. VIL’s base was flat. Bharti outpaced Jio in wireline subscriber additions, for the first time ever.
* With the 5G auction now behind and telcos set to launch their 5G services, the focus currently has shifted to tariff hikes, which remain crucial for ARPU growth. However, given the inflationary pressure, the timeline of the hikes remains uncertain.
? The telecom industry’s VLR base fell sharply by 4.4mn in Jul-22. VLR base decline was seen across all private operators, with both Bharti and Jio seeing a drop of 1mn each, while VIL saw a 1.7mn fall in its base. ? Jio has added the highest number of overall subscribers for the fourth month in a row, with its base growing by 2.9mn. Bharti added 0.5mn subscribers, while VIL’s subs fell by 1.5mn. The overall industry base grew by 0.6mn. ? Wireless broadband subscriber-addition trends saw Jio leading the pack yet again, with addition of 2.9mn subscribers; Bharti was close at its heels, at 2.6mn. VIL’s base was flat. Bharti outpaced Jio in wireline subscriber additions, for the first time ever. ? With the 5G auction now behind and telcos set to launch their 5G services, the focus currently has shifted to tariff hikes, which remain crucial for ARPU growth. However, given the inflationary pressure, the timeline of the hikes remains uncertain.
The overall subscriber base expanded by 0.6mn, albeit slower than the last two months’. Jio clocked the highest subscriber additions for the fourth straight month. The VLR proportion saw a decline for all major private operators, resulting in a sharp 4.4mn drop in the VLR subscriber base. While both Bharti and Jio saw a fall of 1mn each in their VLR sub base, VIL saw its base decline by 1.7mn. The VLR subscriber market share has largely remained stable across private operators. The sub base has declined for all operators for the first time in the last three months. Incremental MNP requests increased further (10.2mn) and are the highest in the last 11 months.
Broadband subscriber base: Jio led the pack in wireless broadband subscriber additions as well (2.9mn adds), closely followed by Bharti (2.6mn adds). VIL’s base was flat. In the wireline segment, Bharti trumped Jio for the first time, adding 0.14mn versus Jio’s 0.11mn addition. Jio now has 6.3mn wireline broadband subscribers, while Bharti is a distant second at 5mn
Rural-Urban mix: Bharti and VIL lost rural subscribers mostly to Jio, which continued to see healthy subscriber growth in both, rural and urban areas, for a fourth consecutive month. On the other hand, Bharti saw growth of 1.6mn in urban subscribers. VIL lost both rural and urban subscribers. The rural proportion now stands at 44%, 48% and 50% for Jio, Bharti and VIL, respectively
Player-wise analysis
Jio: The overall subscriber base rose by 2.9mn in Jul-22 vs. 4.2mn increase in Jun-22. The VLR subscriber base fell by over 1mn MoM, as the VLR proportion saw a slight fall. The company’s VLR subscriber market share was flat at 37.4%, ahead of all other operators’. Jio’s VLR subscriber base witnessed a decline in the Bihar and Uttar Pradesh (E) circles, while seeing an increase in the Maharashtra and Delhi circles.
Vodafone Idea: VIL’s subscriber losses persisted, with the telco losing another 1.5mn subscribers. VLR fell marginally, causing a further decline of 1.7mn. VIL has managed to add VLR subscribers in only one month post its merger. The Uttar Pradesh (E) and Maharashtra circles saw the highest decline in VLR subscribers, while only Delhi and Uttar Pradesh (W) saw a meaningful addition in their VLR subscriber base.
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