India Ratings and Research (Ind-Ra) has published the August 2018 edition of its credit news digest on India’s telecom sector. It highlights the trends in the telecom sector, with a focus on subscriber additions, subscriber market share, broadband subscribers, data usage and pricing.
The key highlights of the report include Ind-Ra’s views that Reliance Jio Infocomm Limited’s outstanding market share growth has been account of its multifaceted approach by offering attractive prepaid/postpaid plans and targeting smartphone users through ultra-cheap high-speed data and digital offerings. In addition, it has targeted price-sensitive feature phone users through low-priced feature phone supporting popular apps and media services through its advent in the cable TV market.
Steady Subscriber Growth: In July 2018, subscriber growth continued and was led by a rise in data subscriber. During the month, 10.6 million wireless subscribers were added, indicating a monthly growth rate of 0.9%. RJio added 11.8 million subscribers, led by the relaunch of RJio’s 4G feature phone, while other telcos reported flat subscriber growth. Aircel Cellular Limited (Aircel) has not reported subscriber numbers since April 2018. Most of Aircel’s subscribers would have moved to other telcos due to the closure of its services.
Consolidating Subscriber Market Share: In July 2018, RJio’s market share increased to 19.6%, surpassing both Vodafone India Limited (Vodafone) and Idea Cellular Limited, thereby becoming the second-largest player on a standalone basis. On a month-on-month basis, the market share of Bharti Airtel Limited (Bharti) marginally declined to 29.8% (June 2018: 30.1%). Vodafone Idea Limited (Vodafone Idea) had a market share of 38.4% in July 2018.
Muted Active Subscriber Growth: In July 2018, the number of active wireless subscribers, based on peak visitor location register (VLR), declined 1.6% yoy to 1,006.3 million. During the 12 months ended July 2018, RJio added 89 million VLR subscribers, while Vodafone added 10 million VLR subscribers. Bharti’s addition of 72 million VLR subscribers during the period includes the 33 million subscribers of Telenor. In July 2018, the telecom industry’s VLR ratio remained stagnant at 87.0% on a month-on-month basis (June 2018: 87.3%; July 2017: 86.2%).
Stagnant Teledensity: In July 2018, the overall teledensity in India increased to 90.4%, up 72bp on a month-on-month basis. Urban and rural wireless teledensity was 159.4% and 58.5% in July 2018 compared with 173.2% and 57.5% in July 2017, respectively. During the month, subscriber additions were 6.1 million in urban areas and 4.4 million in rural areas.
Continued Growth in Broadband Subscriber Base: In July 2018, broadband subscribers increased 48.0% yoy to 460.2 million, driven by low data prices, the relaunch of RJio’s 4G feature phone and better affordability of smartphones. On a month-on-month basis, the broadband subscriber base increased by 13.0 million in July 2018. Through low-priced plans and high-speed data, RJio was able to attract new and existing wireless broadband subscribers and increase related market share to 49.3% in July 2018 (July 2017: 41.4%). In July 2018, the market share of Bharti increased to 20.7% (July 2017: 19.0%) and that of Vodafone Idea combined marginally increased to 23.3% (22.6%).
