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Telecom industry sees expansion after 10 weak months! Benefit of Jio’s IUC plan for Bharti and VIL to reflect now

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Telecom industry, Jio, Jio IUC plan, Bharti, MBB subscriber, VIL, MBB subscribers, reliance jioRJio has added 9.1 m gross subscribers (active subscriber addition stood at 14.3 m – 31% market share).

The Telecom Regulatory Authority of India has released subscriber data for Oct’19. Key insights highlighted below:

* After 10 months of weakness, the telecom industry expanded in Oct’19, with gross subscriber addition of 9.7 m m-o-m to reach 1,183 m; active subscriber addition swelled 20.3 m to 981 m.

* In Oct’19, RJio launched its IUC plans, which supported active/MBB subscriber run-rate for both Bharti and VIL. However, RJio’s pace of subscriber addition still reflects healthy addition. Further, RJio has announced plans in the month-end; therefore, full-month benefit for Bharti/VIL should reflect in November.

* RJio has added 9.1 m gross subscribers (active subscriber addition stood at 14.3 m – 31% market share). Since Feb’19, RJio’s active subscribers have made up 70% of gross subs; however, in Oct’19, it was 1.5x. Also, while Bharti/VIL are focused on retaining quality customers through minimum recharge plans, RJio’s active subscriber adds remain healthy.

* Bharti has reversed its declining subscriber trend – the company added 0.1 m gross subscribers in Oct’19; it also added healthy 6.8 m active subscribers to reach 310 m. It has regained its top position in active subscriber market share with 31.5%.

* On the other hand, VIL added meagre 0.2 m gross subscribers. The pace of active subscriber churn has reduced, but remained negative with 0.7 m loss, reaching 302 m. VIL has the highest market share of 31.5% in gross subscribers; however, RJio is inching toward the top spot with market share of 30.8%.

* Broadband subscriber adds stood at 18.6 m in Oct’19 (+9.3 m in Sep’19) to reach 624 m, forming 63.6% (+60bp m-o-m) of total active subscribers in the market. This healthy addition should support ARPU as MBB subscribers are high ARPU customers.

*VIL/Bharti saw strong MBB adds of 3.6/5 m, which could be attributed to RJio’s IUC plan launch. We expect even better numbers in Nov’19, which would reflect the full-month benefits. However, we believe that RJio’s 9.1 m subscriber adds seem to have had limited impact.

 

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