The India Ratings and Research (Ind-Ra) firm, in its May 2018 edition of credit news digest has stated the trends in the Indian telecom sector. According to Ind-Ra, the trends in the telecom sector are subscriber additions, subscriber market share, broadband subscribers, data usage and pricing. Ind-Ra is in a view that content is emerging as the key differentiator and revenue generator in the intensely competitive telecom market. All major telcos are focusing on converting their applications into one-stop place for subscribers wherein a wide range of options in music, movie, sports, television, among others are available to increase data consumption and retain/increase market share, said Ind-Ra.
Another trend is the decline in the subscriber base. A decline in subscriber base to 1,125 million in April 2018 from 1,183 million in March 2018 could be attributed largely to the closure of Aircel services in various circles and disruption in its interconnect services. All other telcos excluding Aircel reported net subscriber addition of 15.8 million in April 2018. Aircel had 74 million subscribers in March 2018, as per the data released by Trai for the month of April 2018.
Next trend is the Subscriber Market Share. Reliance Jio’s subscriber market share increased 7.9% YoY to 17.5% in April 2018. The share of the top three telcos (Airtel, Vodafone and Idea) increased to 65.4% from 58.1% during the same period. Based on April 2018 data, Bharti Airtel subscriber market share (including Tata Teleservices Limited and Telenor (India) Communications Private Limited) was 33.3% (February 2018: 31.5%) and Vodafone-Idea combined was 37.9% (36.4%).
AGR-Based Revenue Market Share: Based on adjusted gross revenue (AGR) for the March 2018 quarter reported by Telecom Regulatory Authority of India, the combined revenue market share of Bharti, Tata Teleservices and Telenor (India) Communications fell 230bp (basis point) QoQ, while Vodafone and Idea combined gained 50bp. Jio registered the largest revenue market share increase of 460bp, followed by Bharat Sanchar Nigam Limited (BSNL), which gained 210bp. The remaining telcos combined reported a 480bp decline in the revenue market share.
Continued Growth in Broadband Subscribers: Broadband subscriber base increased by 7.2 million to 401 million in April 2018, growing by an average monthly growth rate of 3.3% over the last 12 months. During the last 12 months ended April 2018, Jio’s broadband subscriber market share increased 700bp to 47% while the other three major telcos together reported a 500bp increase.
The rollout of GigaFiber by Reliance Jio: On July 5, 2018, Jio announced Jio GigaFiber services which would provide home broadband services to the subscribers. Jio GigaFiber would facilitate speeds up to 1 Gbps in the broadband segment alongside providing smart home solutions to the users. The comprehensive JioGigaFiber plan would consist of Fibre-To-The-Home (FTTH) broadband service, Jio GigaTV, smart home accessories and a landline connection. The impact of the announcement was visible immediately with Airtel offering discounts at its existing broadband plans and removing the restriction on data limits from its broadband plans in Hyderabad.