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Decoding the industry’s consumer postpaid subscribers

Based on the TRAI’s machine-to-machine (M2M) subs reporting, we infer: 1) the industry’s consumer postpaid (retail + corporate) subs account for a modest ~38 mn subs (~3% of overall subs), but higher ~8% of overall revenue; 2) Bharti accounts for 60%+ of consumer postpaid market share; 3) ~60% of Vi’s reported postpaid subs are typically lower-paying M2M subs; 4) R-Jio’s consumer postpaid base market share likely lower at <15% (versus ~41% SMS); and 5) implied consumer postpaid ARPU at ~Rs385/month is significantly higher (versus Rs151 monthly ARPU for prepaid subs).

Industry consumer postpaid base ~3.3% of overall subs, but ~8% of revenue

As per the TRAI’s May 2024 subscriber report, the industry’s M2M subscriber base stood at 52.3 mn, with Bharti (~28.6 mn M2M subs) accounting for ~55% market share in M2M. As M2M subs are counted as postpaid users, we infer that consumer postpaid (retail + corporate) subs account for modest ~38 mn subs (~3.3% of overall subs) as of end-FY2024. However, consumer postpaid subs account for ~8% of industry’s overall revenue, with an implied ARPU of Rs385/month (versus Rs151 for prepaid subs), based on our estimates.

Bharti by far the market leader in consumer postpaid subs, followed by Vi

Bharti, with 23.1 mn postpaid subs, accounted for ~60%+ of the industry’s consumer postpaid subs market share (versus ~33% overall subscriber market share). With ~14.7 mn M2M subs (as of April 2024), ~60% of Vi’s reported postpaid subs are likely M2M subs. Vi, with ~9 mn consumer postpaid subs, accounts for ~24% consumer postpaid market share (versus ~18.7% overall subscriber market share). Further, we believe that R-Jio’s consumer postpaid subscriber base would be a modest ~5-6 mn, accounting for ~14-15% market share (versus ~41%+ overall subscriber market share).

Industry subscriber base finally above Dec 2021 (tariff hike) levels; R-Jio leads

After 29 months, the industry’s overall wireless subscriber base finally crossed Dec 2021 (large tariff hike) levels to 1,169 mn subs. However, the subscriber base (excluding M2M/IoT SIMs) would likely still be lower than Dec 2021 levels. The industry’s monthly net adds at 2 mn (versus 1.5 mn in Apr) was in line with last 12 month’s average monthly net adds. However, with tariff hike from July 2024, we expect industry net adds to likely remain muted in the medium term. R-Jio (+2.2 mn) was once again the biggest gainer, followed by Bharti (+1.3 mn), while Vi (-0.9 mn) continued to lose subscribers in May 2024 (-0.7 mn mom).

Bharti and R-Jio’s net adds likely to remain marginally below our 1Q estimates

R-Jio’s (+4.9 mn) and Bharti’s (+2.1 mn, 1.5 mn ex-M2M) net adds for Apr-May 2024 are tracking marginally below our estimate of 8.5 mn/3.3 mn paying wireless net adds for 1QFY25. Vi lost 1.7 mn subs in Apr-May 2024 (versus 3.2 mn/2.6 mn overall/paying wireless subs decline in 4QFY24) and could likely be marginally better than our estimate of ~3 mn paying net declines for 1QFY25. However, R-Jio’s 0.73 mn FBB net adds in Apr-May 2024 could have upside risk (versus our estimate of 0.9 mn net adds for 1Q), indicating good traction for FWA.

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