Telecom | Update
Sector Update | 14 July 2020
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Industry loses gross subscribers
Glimpse of COVID-19 lockdown
The Telecom Regulatory Authority of India (TRAI) has released subscriber data for Mar’20
with some glimpses of the lockdown impact. Key insights highlighted below:
The Telecom industry lost 2.9m gross subscribers in Mar’20 (v/s 4-5m monthly
subscriber adds in Jan-Feb’20) to reach subscriber base of 1,158m. Bharti/VIL lost
1.3m/6.4m subscribers while RJio added 4.7m subscribers. Active subscriber base
increased by 2.2m (v/s adds of 0.5m in Feb’20) to reach 989m as VIL lost 0.8m
subscribers and Bharti/RJio added 0.9m/2.5m active subscribers. We are certain that
the lower addition has been hit by restrictions from mid-Mar’20 and the nationwide
lockdown during the latter half of Mar’20.
Bharti lost 1.3m gross subscribers (after adding 0.9m in Feb’20) to reach 328m. The
company gained 0.9m active subscribers (v/s 1.5m in Feb’20) to reach 315m. Bharti
remains the #1 player in terms of active subscriber market share with share of 31.9%.
RJio added the highest number of gross subscribers with 4.7m adds (6.3m in Feb’20).
RJio’s pace, however, has reduced from the peak addition of 12-14m monthly
subscribers and average addition of ~6.5m monthly subscribers in Jan-Feb’20, even as
it continues to grow. It has reached 33.5% gross market share while maintaining its
VIL continues to lose its subscriber base with 6.4m/0.8m reduction in gross/active
subscribers to 319m/294m. Subsequently, VIL’s gross/active subscriber market share
declined to 27.6%/29.7% (v/s 28%/29.8% in Feb’20). VIL stands at the last spot in both
gross and active subscriber market share.
Industry MBB subscriber adds stood at 6.2m (v/s 7.7m increase in Feb’20) to reach
668m. Currently, MBB subscribers account for 67.5% (+50bp MoM) of total active
subscribers, rising continuously from 53% in Mar’19.
Bharti’s MBB subscriber adds at 2.4m were stronger than the previous month addition
of 1.3m. RJio added 4.7m MBB subscribers, lower than the previous month adds of
6.3m. VIL lost 0.8m MBB subscribers. Bharti/RJio’s MBB subscriber market share rose
by 20bp/10bp MoM to 21.9%/58%. RJio’s MBB adds also includes Jiophones
(excluding which, we estimate it to be similar to Bharti).
Our earlier telecom update
Subscriber loss majorly driven by VIL
The Telecom industry lost 2.9m gross subscribers in Mar’20 to reach subscriber base of
1,158m. This is in contrast to the gross addition of 4-5m monthly subscriber adds seen in
Jan-Feb’20, possibly on account of the nationwide lockdown measures and rise in tariff
plans. RJio’s gross subscriber base increased by 4.7m (v/s 6.6m/6.3m adds in
Jan/Feb’20) to reach 388m, while Bharti saw loss of 1.3m after 5 months of continuous
subscribers adds. VIL lost huge 6.4m gross subscribers during the same period.
Industry’s active subscriber addition stood at 2.2m in Mar’20 (v/s 0.5m in Jan’20) to
reach 989m. Bharti/RJio continue to add active subscribers (despite the lockdown in
the second half on Mar’20) by 0.9m/2.5m, while VIL lost 0.8m active subscribers in
Mar’20. VIL’s pace of active subscriber loss has reduced from losing ~1.4m/month,
since the tariff hikes in Dec’19 (lost 2.8m in Feb’20).
Research Analyst: Aliasgar Shakir(Aliasgar.Shakir@motilaloswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.