ICICI Securities, a subsidiary of ICICI Bank on Wednesday said in a report that the execution by Bharti Airtel has been “impressive” as Airtel continued to add more users as compared to its rivals. The report is on the heels of the Telecom Regulatory Authority of India (Trai) releasing the Telecom Subscription Data for a period ending January 31, 2021. The Trai data highlights that Airtel added over 58 lakh new users in January while Reliance Jio and Vodafone Idea roped in over 19 lakh and 17 lakh new users in the month. The state-run Bharat Sanchar Nigam Limited (BSNL) is said to have added over 80,000 new users in January with the industry wide gross subscriber additions said to have crossed over 96 lakhs.
Analyst Says Vodafone Idea Shows Signs of Stability
Reliance Jio is now said to have a 35.30% market share as of January 31, 2021, while the market share of Airtel and Vodafone Idea hit 29.62%and 24.58% respectively. The Trai data highlights that the telecom industry witnessed the net addition of over 30 lakh new active users in January with Airtel roping in 65 lakh new active users. However, Reliance Jio is said to have lost over 33 lakh active users in January while Vodafone Idea active subscriber base is said to have dipped by 260,000.
In its report, ICICI Securities said that the dip in the Reliance Jio active subscriber base “explains its renewed aggression to push JioPhone.” The largest wireless operator in India in late February announced a “New JioPhone 2021 Offer” that enables users to purchase a JioPhone device with “unlimited” voice and data for a period of one or two years. The “New JioPhone 2021 Offer” is said to carry a price tag of Rs 1999 for the two year plan while the annual plan is said to be priced at Rs 1499. JioPhone is said to have over 10 crore users with the operator now said to be targeting the 30 crore feature phone subscriber with its 2021 offer.
Motilal Oswal Financial Services on Wednesday said in a report that the Jio “continued to disappoint” with its subscriber additions.
Meanwhile, ICICI Securities said that Vodafone Idea “fared well” in January with the firm highlighting that the decline in its active subscriber base has “significantly decelerated.” Similarly, Motilal Oswal said that Vodafone Idea numbers for January reflected the “bottoming out of the subscriber churn.”
Ravinder Takkar, Vodafone Idea CEO in the third quarter earnings call in February, 2021, said that the operator’s “engagement” with its users improved “significantly” post the Vi brand launch in September, 2020.
“Since our brand launch in September, Vi has started to gain momentum and traction in the market, not only we brought this unified brand, but overall, you would see the gross additions in the market are improving,” Takkar said in the third quarter earnings call.
The CEO of Vodafone Idea said that the operator has been witnessing the growth in its 4G user base and that its net additions have turned “more stable.”
“I think we are seeing a very positive trend on subscribers in all metrics, whether it's gross or reduction in churn and net additions,” Takkar said. “And so overall, we see a lot of positive momentum that is starting to take place.”
Growth in Airtel Active User Base Indicates Quality Additions
While it remains to be seen as to whether Vodafone Idea can continue to build on its positive momentum in the upcoming months, analysts however are positive on the performance of Airtel.
ICICI Securities said that the increase in the active user base of Airtel was largely driven by the total subscriber net additions “indicating the improving quality” of the overall subscriber additions.
It has to be noted that the Trai data highlights Airtel now has 33.57 crore active subscribers as of January 31, 2020. The key rivals of Airtel including Reliance Jio and Vodafone Idea are said to have 32.45 crore and 25.63 crore subscribers respectively.
“Bharti [Airtel] continued its healthy streak, outpacing peers since the past seven months,” Motilal Oswal said in its report. “The quality of subscriber additions is reflected in its strong 5.5m 4G additions.”
The second largest wireless operator in India is said to have added 2.9 crore active subscribers since May, 2020.