Mukesh Ambani-led Reliance Jio Infocomm's customer acquisition drive is impacting smaller telecom operators more than incumbent telcos like Bharti Airtel, Vodafone and Idea Cellular. Smaller telcos such as Telenor, Aircel, Reliance Communications, Tata Teleservices and Sistema are either struggling to grow in India or are in a process to sell their operations. These players lost five million users in the first two months of the new financial year.
According to a report by CLSA, the 4G entrant has managed to capture 9% of all active mobile phone users in India with majority customers coming from these smaller telcos. Jio's 80% active subscriber additions came from smaller operators in May while the balance has come from Vodafone India and Idea Cellular, CLSA report revealed.
Vodafone and Idea Cellular's active subscriber base declined by 0.1 million and 0.4 million, respectively, in April and May, the report revealed. India's smaller players lost five million users in the first two months of the new financial year.
CLSA said smaller operators’ 19% subscriber share would further decline due to unlimited voice plans offered by larger players. The unlimited voice plans are taking away the incentive of having a second connection only for voice, the agency said.
The findings revealed that Jio and Bharti Airtel added active subscribers in April-May at 8.7 million and 1.5 million, respectively. Overall, Jio added 4.78 million customers in May, while Airtel gained 2.09 million, according to the Trai data.
Airtel had 270 million active subscribers while Jio had 89 million at May-end, the report added.
Jio started with offering free data and voice services till March 31, 2017, post which it launched new plans. The most prominent plan announced by the company was for Rs. 309, which offered its subscribers 1 GB per day of data for 84 days. This translated into an ARPU of Rs. 96 for the three months. These plans were offered to consolidate the healthy subscriber base which the company had amassed during its free offer period.
ICRA said that Jio’s new plans are attractively priced and would keep the competitive intensity for the industry elevated. It said that the move would help the telco improving its average revenue per user (ARPU), which is a positive for the telecom industry, ICRA recently said y, adding that the pricing by Jio indicates some easing of pressure on ARPU while the competitive intensity of the industry would remain high.