Telecom sector: Monthly Update!

Telecom sector: Monthly Update!

Last updated: 28 Dec, 2020 | 01:25 pm

Telecom sector: Monthly Update!

Airtel outperforms Jio, Vodafone Idea continues to lose subscribers 

  • Airtel added 3.67 million new subscribers in October, whereas Jio’s addition to its user base stood at 2.22 million. Vodafone Idea lost 2.65 million of its existing users.
  • After a gap of four years, Airtel had regained the leadership position in subscriber addition in September 2020, thus October is the second consecutive months where the telco has outperformed its peers.

Strong active user base for Airtel, Jio lags behind. 

  • While Jio is the market leader when looked at overall subscribes, Airtel leads significantly on active user conversion per cent. Airtel’s active user base stood at 97% with Jio at 78.59% and Vodafone Idea at 89%.
  • Jio has a total subscriber base of 406 million users, however, it only has an active user base of 319 million users. On the other hand, Bharti Airtel has an active user base of 320 million users on a total subscriber base of 330 million users. 
  • Jio’s active subscribers market share remained flat on a month to month basis at 33.2% while Bharti Airtel’s stood at 33.3% (up 0.23%).  Vodafone Idea’s market share fell by 0.2% to 27.1%.

INDmoney analysis 

  • India’s telecom sector’s Average revenue per user (ARPU) for FY20 was Rs. 108/month among the lowest in the world. The industry has entered into a price consistency phase and tariff hikes are expected to continue gradually. The sector’s revenue and ARPU are expected to double in the next 5-6 years.
  • While there have been fundraising reports for Vodafone Idea, the operator has huge AGR dues and is struggling financially. Absence of fundraising will create a problem and it is probable that the Indian telecom sector is heading towards a virtual duopoly. 
  • Bharti Airtel and Reliance JIO are expected to maintain their market leader status. Bharti is expected to benefit the most from the revival in industry revenues due to a strong spectrum footprint, robust balance sheet and strong execution.