BackMobile subscriber additions trebled in October-March, says CLSA report
The number of new users surged to 116 million in October-March from 37 million in the same period of the fiscal ended 31 March 2016
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New Delhi: Mobile subscriber additions by Indian telcos jumped more than three times between October and March, the highest in a six-month period since 2011-12, as Reliance Jio Infocomm Ltd’s free services attracted more customers and forced other companies to engage in a tariff war.
The number of new users surged to 116 million in October-March from 37 million in the same period of the fiscal ended 31 March 2016.
“The sharp jump in industry subscribers was driven by Reliance Jio, which reported net subscriber additions of 93 million on the back of offer of free services," brokerage firm CLSA said in a 28 April report.
The report, however, added despite the numbers added by Mukesh Ambani-promoted Reliance Jio, the top three firms—Bharti Airtel Ltd, Vodafone India Ltd and Idea Cellular Ltd—have not really suffered, at least in terms of number of subscribers.
“Surprisingly, despite the new entrant’s 93 million additions, the top three incumbents have still reported a 12% year-on-year rise in subscriber additions to 39 million during H2FY17," CLSA said.
To be sure, Reliance Jio has signed up more than 100 million users since its launch in September, offering free data and voice calls, undercutting established rivals and eroding industry profitability.
Jio initiated a price war and offered free voice calls and data until the year-end in a promotional offer, and later extended it to 31 March, and further to June-end, which was later rolled back.
It has also sparked consolidation, with Vodafone Group Plc’s India unit and Idea Cellular deciding to merge to create India’s largest telecom firm. The annual revenue of Indian telecom firms declined for the first time since 2008-09 to Rs1.88 trillion in 2016-17 (from Rs1.93 trillion the previous year), and is likely to decline further to Rs1.84 trillion in 2017-18, CLSA said in a report released on 7 April.
CLSA said smaller operators in the sector have lost 15 million subscribers compared with 2.7 million additions last year.
The brokerage noted that the current growth in the number of subscribers indicates an underlying surge in multi-SIM users.
“This rise has also been exacerbated due to operators’ reluctance to disconnect inactive/dormant subscribers. Consequently, the share of inactive subscribers for the industry has risen from 9.6% in September to 12.4% in December (last available data)," it said.
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