Airtel, Jio and Voda lose active subscribers in April
PremiumA continuation of this trend could indicate sim-consolidation amidst rising tariffs, analysts at Jeffries said
Telecom operators witnessed a decline in active subscribers in April 2022, the second time in a decade, after losing users in April 2020 during the covid-l9 lockdown.
"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.
Telcos' active subscribers fell month-on-month by 7 million to 1,014 million in April, the sharpest decline in the past 10 months, due to SIM consolidation or users switching off second SIMs, sector watchers noted.
While all operators witnessed active subscriber loss in April compared to March, Jio's decline was the lowest at 0.1 million, while Bharti Airtel and Vodafone Idea lost 3.1 million and 3.8 million active subscribers, respectively, according to Telecom Regulatory Authority of India (Trai) data for April issued on Thursday.
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 sector's reported subscriber base rose by 0.6 million in April led by Jio which added 1.7 million subscribers taking its base to 406 million. Bharti Airtel added 0.8 million subscribers to take the total to 361 million. Vodafone Idea's reported subscriber base declined by 1.6 million to 259 million. The number of active users of each of the telcos stood at 93% or 377.6 million for Jio, 98% or 353.7 million and 86% or 222.7 million for Vodafone Idea.
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 20 million, but Jio has outperformed with 47 million user adds vs Bharti's 8 million driven by the discount that Jio offers, and Bharti's sharp tariff hike in prepaid voice segment, analysts at Jeffries noted.
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Jio gained 30 basis points 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 24-27 million over February-April, 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%.