Airtel, Jio and Voda lose active subs 2nd time in a decade

All major telcos - Bharti Airtel, Reliance Jio and Vodafone Idea - lost active subscribers in the month of April, only the second such time in a decade, after losing subscribers in April 2020 during the Covid pandemic lockdown.

Telcos lost 7 million active subscribers in April, the sharpest decline in the past 10 months, due to SIM consolidation or users switching off second SIMs, sector watchers noted. Active subscribers are those who have used their SIM cards to make atleast one call in the month.

“In the past 10 years, this is only the second time when all operators have witnessed decline in active subscribers. A continuation of this trend could indicate sim-consolidation amidst rising tariffs,” analysts at Jeffries said in a note to clients following subscriber data released by the sector regulator.

While all operators witnessed active subscriber decline in April, Jio’s decline was the lowest at 0.1m while Bharti and VIL lost 3.1 and 3.8m active subscribers, respectively, according to Telecom Regulatory Authority of India (Trai) data for April issued on Thursday.

The sector’s reported subscriber base rose by 0.6 mn in April led by Jio which added 1.7m subscribers taking its base to 406 mn and Bharti Airtel which added 0.8m subscribers to take the total to 361 mn. Vodafone Idea’s reported subscriber base declined by 1.6m to 259 mn. The number of active users of each of the telcos stood at 93% or 377.6 mn for Jio, 98% or 353.7 mn and 86% or 222.7 mn for Vodafone Idea.

Overall, Jio’s subscriber addition momentum improved month-on-month, whereas Bharti’s strong momentum from earlier months seems to have slowed in April, said Navin Killa, managing director at UBS in a note on the sector.

The firm added that Jio remained the market leader, with a subscriber market share of 35.5%, which increased by 10 basis points on-month, followed by Bharti Airtel with a 31.6% share and flat additions on-month in April. Vodafone Idea ended April with 22.7% share, down 10 basis points on-month.

Since March 2021, sector’s active subscriber additions have been modest at 20m, but Jio has outperformed with 47m sub adds vs Bharti’s 8m, driven by the discount that Jio offers versus Bharti and Bharti’s sharp tariff hike in prepaid voice segment, analysts at Jeffries noted. Jio gained 30bps market share in active subscribers while Vodafone Idea and Bharti lost 20bps and 5bps market share, respectively.

With Jio’s inactive subscribers being steady at 24-27m over Feb-Apr-22, analysts said that Jio’s subscriber cleanup has ended which could drive higher reported subscriber additions for Jio in the future. “Jio’s leadership in active subscriber adds and Bharti’s ARPU focus bode well for the sector’s tariff outlook,” Jeffries noted.

Jio was also the only operator to add rural and urban subscribers, while VIL lost subscribers on both fronts. The weak subscriber addition trends can be attributed to the November 2021 tariff hikes and higher smartphone inflation, said Naval Seth, analyst at Emkay India Equity Research in a note to clients.

Jio was the only operator to see additions in both urban and rural subscribers, while the mix for all operators remained stable. Bharti saw a marginal decline in its urban subscriber base, while Vodafone Idea lost both urban and rural subscribers. Jio continued to have the highest urban subscribers at 56%, followed by Bharti at 52% and Vodafone Idea at 50%.