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