Indian Telecom Companies Update: October 2022

The Telecom Regulatory Authority of India (TRAI) released the telecom subscription data for October yesterday. The overall subscriber base declined in October as VIL lost the most subscribers. Let us look at the details and how it is impacting the share price of telecom players.

Indian Telecom User Base

Key highlights from TRAI subscriber data for October

• The telecom subscriber base in India declined by 117 crore in October as Vi lost a large number of mobile customers in October.
• Total mobile subscribers decreased to 114.36 crore at the end of October from 114.54 crore at the end of September.
• Reliance Jio and Airtel added new customers in October, while all other players - Vodafone Idea and BSNL lost a large customer base.
• Reliance Jio and Bharti Airtel combined added 22.1 lakh, mobile customers. On the other hand, VIL lost 35 lakh mobile customers, MTNL lost 3591, and BSNL lost 5.19 lakh mobile subscribers.
• The private access service providers held a 90.24% market share of the wireless subscribers, whereas BSNL and MTNL, the two PSU access service providers, had a market share of only 9.76%.
• Monthly growth rates of urban and rural wireless subscriptions were -0.31% and 0.03%, respectively.
• Wireline subscribers increased from 26.47 million at the end of September 22 to 26.82 million at the end of October 22. BSNL and MTNL, the two PSU access service providers, held 36.04% of the wireline market share as of 31st October 2022.
• In October 22, a total of 11.81 million requests were received for MNP (Mobile Number Portability). The cumulative MNP requests increased from 748.11 million at the end of September 22 to 759.92 million at the end of October-22, since the implementation of the MNP. 

Share price of Telecom companies today

• Airtel's share price was down 1.65% on Tuesday afternoon amid weak global cues of the overall market.
• Reliance shares were down 0.42% on Tuesday afternoon.
• Vodafone Idea shares have fallen 1.80%, the most among listed peers. 

What are analysts saying about TRAI's October release?

Morgan Stanely: It pointed out that industry mobile subscribers declined for the second consecutive month, whereas mobile broadband subscribers' addition rebounded to the trend in May-Aug 22. It noted that VIL’s market share loss of 20-30 basis points each month continued. The telco’s subscribers in the metro region have declined for the first time in five months.

Jefferies: Airtel's move to potentially raise voice tariffs could aid active subscriber market share gains for Jio, which also bodes well for the sector's tariff outlook. The firm has factored this in numbers by baking in three tariff hikes of 10% each during 4QFY23, 4QFY24, and 4QFY25 for both Bharti Airtel and Reliance Jio. 

The brokerage has a HOLD call on Airtel with a target of Rs 855 per share. It has given Reliance a BUY rating with a target price of Rs 3,100 per share.

This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.