April mobile subscriber data points to weakness: IIFL Capital Services

17 Jun 2022 , 11:43 AM

According to TRAI’s April subscriber report: 1) all players saw a reduction in active (VLR) mobile subscribers, with JIO faring relatively better; 2) JIO was the only telco to report mobile BB subscriber adds; and 3) there was a sharp acceleration in FTTH subscriber adds for both JIO and Bharti. Softness in 2G-to-4G upgrade cycle led by higher entry-level smartphone prices seems to have resulted in modest broadband subscriber adds. The inability of low-ARPU subscribers to recharge their balance amid rising inflationary pressure may explain the fall in VLR adds, though one month’s data is insufficient to draw an inference. Both Bharti and Vi in their Q4 earnings calls were confident that inflation would not impede further tariff hikes in 2022, considering low wallet-share of telecom.

Bharti remains the top pick of IIFL Capital Services in the telecom sector.

All telcos lost active subscribers in April

On reported mobile subscriber adds, JIO led the industry at 1.69 million in April, marking an improvement from 1.26 million in March. On the other hand, Bharti saw a deceleration MoM to 0.82 million from 2.26 million. Vi saw 1.56 million subscriber loss in April (better than the 2.82 million loss in March). The industry saw 7.48 million VLR subscriber loss, the worst since COVID second wave in May 2021, with all players witnessing losses. JIO saw a mere 0.1 million loss, but losses for both Bharti and Vi were significant, at 3.1 million and 3.75 million, respectively. As of April 2022, JIO/Bharti/Vi had VLR subscriber base of 378.9 million/352.7 million/222.3 million. VLR ratio (active subscribers as a proportion of total subscribers) stood at 93.4% for JIO versus 97.7% for Bharti.

Only JIO saw positive mobile broadband adds

In terms of mobile broadband subscribers, JIO added 1.69 million in April. Bharti/Vi lost 0.32 million/0.43 million in April versus gains in March. Bharti had mentioned on the Q4 earnings call that entry-level smartphones, which used to start at around Rs6-7k, are now almost Rs10k; this has hence led to some softness in upgrade from 2G to 4G across the industry. Bharti believes this is a temporary phenomenon and, as people tend to get used to a new normal, the initial shock is likely to wear off in the next few months.

Strong FTTH adds for JIO and Bharti

JIO saw a marginal acceleration in monthly adds versus recent months to 0.35 million. Bharti’s 0.32 million adds were its best ever, similar to overall additions in entire Q4.

Reported mobile subscribers

(mn)	Aug-21	Sep-21	Oct-21	Nov-21	Dec-21	Jan-22	Feb-22	Mar-22	Apr-22
JIO	443.9	424.8	426.6	428.6	415.7	406.4	402.7	404.0	405.7
Bharti	354.2	354.5	354.0	355.3	355.8	356.5	358.1	360.3	361.2
Vi	271.1	270.0	269.0	267.1	265.5	265.1	263.6	260.8	259.2
BSNL	117.6	116.7	116.7	116.5	117.6	117.2	117.1	117.0	116.6
Total	1,186.7	1,166.0	1,166.3	1,167.5	1,154.6	1,145.2	1,141.5	1,142.1	1,142.7

Source: TRAI, IIFL Research

Reported mobile subscriber market share

	Aug-21	Sep-21	Oct-21	Nov-21	Dec-21	Jan-22	Feb-22	Mar-22	Apr-22
JIO	37%	36%	37%	37%	36%	35%	35%	35%	36%
Bharti	30%	30%	30%	30%	31%	31%	31%	32%	32%
Vi	23%	23%	23%	23%	23%	23%	23%	23%	23%
BSNL	10%	10%	10%	10%	10%	10%	10%	10%	10%

Source: TRAI, IIFL Research