Key points :
- Vi and Airtel lost users in June, Jio emerged as the only winner adding 4.5 million customers.
- An expert said the loss is the highest for Vi due to inadequate investment in improving customer services.
- Ambani’s Reliance Jio now has 34.8% wireless market share, Airtel holds 27.8% and Vodafone Idea holds 26.8% share.
Vi, previously Vodafone India Lt. lost 4.8 million users in June, making it the eight consecutive month of them losing customers. In May, both Vi and Airtel lost 4.7 million each during the lockdown.
Ambani’s Reliance Jio now has 34.8% wireless market share, Airtel holds 27.8% and Vodafone Idea holds 26.8% share.
“Shift to work-from-home from offices is one of the factors for loss of subscribers. Traffic and demand has increased in home circles which has revealed the poor quality of network. This may be one factor customers dropped out of their existing networks,” explained Rajiv Sharma, head of equity research at SBICAP Securities.
The loss is the highest for Vodafone Idea, which has not invested much in improving its services. The company has limited scope to increase its capex due to stressed financials, Sharma further elaborated.
The overall number of mobile subscribers declined in June, the fixed-line subscriber base rose substantially due to the Centre’s focus to improve broadband connectivity. Jio, Airtel and Vodafone added wireline users, but BSNL being the only one to lose wireline customers in June. Total wireless urban subscription fell from 637.9 million at the end of May to 636.8 million in June and Rural subscriptions declined from 525.8 million in May to 523.7 million as of 30 June.
A research report by JPMorgan states, “The monthly decline rates of urban and rural telephone subscription were 0.16% and 0.41%, respectively, during the month of June 2020,” the telecom regulator said. In the fixed broadband category, BSNL led with 7.9 million subscribers in June, followed by Bharti Airtel at 2.5 million, Atria Convergence Technologies (ACT) at 1.7 million and Jio at 1.1 million. Both Jio and Airtel recently launched cheaper fixed broadband plans to attract customers in a tariff war-stricken market. On Tuesday, Jio launched a slew of postpaid plans for higher-paying premium customers, which threatens Airtel and Vodafone’s limited but profitable market of such users. “Jio’s target perhaps is upgrading its own 280 million smartphone subscribers to postpaid and higher Arpu (average revenue per user) plans. This could help nudge the overall market to higher Arpus and be a positive for the industry,”
Managements of both Airtel and Vodafone Idea have hinted at another round of tariff hike, aiming to lift Arpu first to ₹200, and eventually to ₹300.
In June Bharti Airtel Ltd. cut its loss to 1.1 million while State-owned Bharat Sanchar Nigam Limited (BSNL) lost 1.7 million users. Reliance Jio Infocomm Ltd emerged as the only gainer in June as adding 4.5 million new customers according to data issued by The Telecom Regulatory Authority of India (TRAI) on Thursday.
Overall, India’s gross mobile subscriber base reduced by 3.2 million and stood at 1.4 billion at the end of June.
