BSNL Subscriber Gain Not a Threat to Jio, Airtel and Vi

Reported by Tanay Singh Thakur September 25th, 2024 at 03:50 pm

Jefferies has said in a note that BSNL is unlikely to pose a risk to the business of the private telcos even if it adds customers due to lower tariffs. Vodafone Idea's CEO Akshaya Moondra has also said a similar thing.

Highlights

Bharat Sanchar Nigam Limited (BSNL), a state-run telecom operator, recently gained subscribers in the month of July 2024 while the private telcos lost customers.
This is not a normal sighting for the industry.
The private telcos hiked the prices of their plans.

bsnl subscriber gain not a threat to

Bharat Sanchar Nigam Limited (BSNL), a state-run telecom operator, recently gained subscribers in the month of July 2024 while the private telcos lost customers. This is not a normal sighting for the industry. However, one can understand why this happened if one sees what private telcos did. The private telcos hiked the prices of their plans. Some plans got pretty expensive compared to what they used to cost, and thus, users ported out to the BSNL's network which has lower cost tariffs. So one thing is clear, this subscriber addition for BSNL didn't come out of quality concerns, but price concerns. You can't win in the telecom market with just a price differentiation alone.

Jefferies has said in a note that BSNL is unlikely to pose a risk to the business of the private telcos even if it adds customers due to lower tariffs. Vodafone Idea's CEO Akshaya Moondra has also said a similar thing. Moondra said that while they are witnessing a trend of their customers porting to BSNL's networks, this would reverse when the customers look for better 4G connectivity.

In terms of 4G rollout, BSNL is far behind the private telcos. Additionally, with the recent funding, Vodafone Idea is in a better place and thus is focusing on upgrading networks. Vi will launch 5G very soon in India.

BSNL added 2.9 million users in July 2024 while the private telecom operators lost users. The telcos were already expecting to see some SIM consolidation post the hikes, but they are not too worried about it. The goal for them is to boost revenue levels which in turn will help grow the average revenue per user figure.

Data subscribers who want more quality data will mostly be ready to pay more to the private telcos for quality services. Thus, the trend will likely reverse and it will go back to the way it was, BSNL losing customers and private telcos adding them. Things can only change for BSNL in the medium to long term if the telco can bring 4G fast.