Key takeaways include:
Despite rising smartphone prices and inflationary pressures, Bharti’s mobile BB (4G) subscribers were ~5.2mn in October + November, suggesting potential upside to the 4mn estimated by IIFL Capital Services for Q3. Bharti’s Q3 Mobile revenue growth could surprise positively versus +2.1% estimated by IIFL Capital Services (and Jio’s estimated +1.7% in Q3).
Analysts at IIFL Capital Services note that the two circles (Haryana and Orissa) where Bharti took sharp 2G price hikes in mid-November, did not a material VLR subscriber decline in November; though a clearer picture will emerge only from December and January subscriber data. With Bharti extending these hikes to more circles, it appears that the company is confident of revenue accretion despite the weak macro drop. These could add ~1-1.5% to mobile revenue in future quarters.
Jio led on reported subscriber adds
On a reported basis, Jio added 1.43mn mobile subscribers in November — similar to October. From Jio’s reported Q3 results, it is evident that it sustained this momentum in December. Bharti’s 1.06mn adds were the highest in recent months. Vi lost 1.82mn subscribers in November, albeit lower than in recent months.
Bharti shone on active subscriber adds
On active subscribers, Jio lost 2.98mn subscribers in November with its VLR ratio deteriorating by 100bps MoM to 91.8%. That said, it came after a very strong October, in which Jio had added 4.9mn active subscribers. Bharti was the only telco with positive active subscriber adds in November (+0.97mn), making up for the loss in October. Vi’s 2.02mn VLR loss remained elevated. As of end-November, Jio/Bharti/Vi had active sub base of 388mn/359mn/210mn.
Bharti’s two circles with sharp 2G price hikes showed resilience, too early to make inferences
In two circles (Haryana and Orissa) — Bharti discontinued the entry level 28-day 2G pack priced at Rs99 in mid-November — which effectively resulted in the entry-level plan starting at Rs155. TRAI’s November data indicates that reported subscriber base rose MoM, while VLR ratio was largely stable in these two circles. This suggests limited SIM consolidation in the first few days after the tariff hike.
Bharti extending 2G price hikes in more circles, is a positive
While a clearer picture on SIM consolidation would emerge only in subsequent months, Bharti’s recent extension of these hikes in more circles suggests that the exercise may have been revenue-accretive. It appears that once Bharti extends this across India, Vi may also follow suit. Even if Jio were to keep its entry-level Jio Phone plan price unchanged at Rs91, subscriber churn from Bharti and Vi to Jio may be limited by handset availability.
Bharti’s mobile broadband (4G) subscribers in October and November trending above Q3 estimates of IIFL Capital Services
On mobile broadband subscribers, Bharti saw 2.15mn adds in November — quite healthy, albeit lower than the 3.03mn in the festive month of October. Bharti’s numbers were ahead of Jio’s 1.43mn. Vi’s 0.11mn adds were similar to recent months. Bharti’s 5.18mn adds in October and November are tracking ahead of 4mn estimated for Q3 by IIFL Capital Services.
Fixed BB continues to see steady momentum
On fixed broadband subscribers, Jio’s 0.26mn adds and Bharti’s 0.15mn adds were similar to recent monthly run-rate. Analysts at IIFL Capital Services note that BSNL has added subscribers in past six months, after having witnessed sustained decline. Jio/Bharti/BSNL had 7.38mn/5.56mn/4.02mn fixed BB subscriber base, as of end-November.
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