4G Subscriber Addition Muting Due to Higher Tariffs, Costly Phones

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The Telecom Regulatory Authority of India (TRAI) released its monthly performance report on Thursday for the month of April 2022. As TelecomTalk reported, the active subscriber base of all the telcos went down. The total industry-active subscriber base dipped by 7.8 million MoM. Airtel’s active subscribers dipped by 3.1 million, VIL's (Vodafone Idea Limited) active subscriber base dipped by 3.8 million, while Jio lost 0.1 million active users.

The industry-wide MBB (mobile broadband) subscribers stood at 760 million in April 2022, which reflects the slow growth of 4G subscribers because of higher tariffs and rising entry-level smartphone costs, said ICICI Securities. However, one positive in the mobile business for the telcos would be a slower churn rate of 0.7% compared to 0.8% in March 2022.

Why Are Active Subscribers Dipping for the Industry?

Because of higher tariffs, it is a high possibility that the users have stopped recharging their secondary SIM just to keep it active. Due to tariff hikes, the mobile bill costs would have become unbearable for some. In such scenarios, keeping a secondary SIM active makes no sense.

With further tariff hikes, we might see an even larger decline in the number of active users in the country. The number of users who could afford to keep a secondary SIM active just for the sake of it would come down significantly.

All the telcos have lost active users in April 2022. It will be interesting to see the figures for May 2022. It would determine whether the trend of closing secondary SIM is catching up or not. Most importantly, this puts a dent in Reliance Jio’s ambition to get 500 million subscribers. If users just keep deactivating their secondary SIMs, there will not be as many connections anymore for a telco to reach 500 million users. Jio’s tariffs are lower than other operators, but not so much that it becomes the top choice right away.

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