The key highlights of the report are as under:
Bharti Continued to Lead Expansion in Subscriber Base in October 2020: The industry-wide subscriber base continued to grow by 3.2 million subscribers in October 2020. Industry-wide visitor location register subscriber base, which shows the active subscribers, also grew by 2.5 million in October 2020.
Even though both Reliance Jio Infocomm Limited (RJio; 'IND AAA'/Stable) and Bharti Airtel Limited (BAL; debt rated at IND A1+) are the main drivers of growth in industry subscriber base, the pace of growth in subscribers of BAL in its wireless subscriber base (3.7 million in October 2020) remained higher than RJio (2.2 million subscribers in October 2020) for the third month in a row. BAL's active subscriber addition also grew by 3.0 million subscribers in October 2020 as against the growth of 1.1 million in the subscribers of RJio and a dip of 1.2 million visitor location register subscribers of Vodafone Idea Limited (VIL). Moreover, in October 2020, BAL led the pack in terms of the addition in broadband subscribers, wherein the telco reported the highest increase in broadband subscribers (4.2 million) in October 2020, followed by RJio (2.4 million) and VIL (0.7 million).
Broadband Penetration Continues to Rise: The number of broadband subscribers increased to 62% of the overall wireless subscriber base in October 2020 from 61% in September 2020 and 47% in March 2019. In October 2020, the number grew by strong 8.1 million (September 2020: 9.5 million). This along with a rise in data tariffs reflects that the Indian telecom industry is moving towards a higher ARPU (average revenue per user) regime. The tariff differentials for the pre-paid and post-paid tariff plans among the telcos are already narrowing down over the past one year. The post-paid tariff plans announced by RJio a few months ago and the recent tariff hike by VIL for select plans indicate the inclination of industry players towards a higher ARPU regime in the long run.
RJio Remains Largest by Revenue & Subscriber Market Share; BAL Picking-up Pace while VIL Consistently Losing Share: RJio continues to be the largest player in the Indian telecom industry in terms of subscriber market share (SMS) and revenue market share (RMS). RJio continues to garner share largely at the expense of VIL. RJio held SMS of 35.3% in October 2020 and RMS of 38.2% in 2QFY21. While BAL had shown resilience in the past and is now picking up pace, with its overall wireless SMS increasing to 28.7% in October 2020 from 28.4% in September 2020, VIL continues to lose SMS (October 2020: 25.4%; September 2020: 25.7%). RJio also had a dominant market share of 57.2% in the broadband segment (as against 16.9% for VIL and 23.9% for BAL), since all of RJio customers are in the broadband category.
Other Industry Developments: (a) The Union Cabinet has approved the next round of 4G auctions, to be held by March 2021. The Department of Telecommunication's plan is to sell spectrum in various bands in the 700-2,500MHz frequencies. This will be the key event to watch out for in 2021. (b) In December 2019, the Telecom Regulatory Authority of India extended the implementation of zero interconnection usage charges regime to January 2021 from January 2020 earlier. Although the telco-wise impact is yet to be ascertained, the charges which stood at 0.06 paise/minute, will become zero effective from 1 January 2021, according to the said regulation unless it is further postponed by the regulator.