BackVodafone Idea may not sustain subscription gains
Vodafone Idea signed up 1.7 million customers in January, after losing 55.4 million users since October 2019The company has been actively migrating its 2G users to 4G service, while it re-farms its existing spectrum to improve service quality
PremiumVodafone Idea Ltd’s (VIL) net addition of wireless users in January, the first time in 14 months, could be a one-time gain and may not sustain, said analysts.
The turnaround in January was due to a new reporting method adopted by the debt-laden operator, they said.
VIL, the third-largest telco by market share, added 1.7 million users in January, after losing a total of 55.4 million users since October 2019.
“VIL reported a sharp spike in its customer base in Uttar Pradesh West (3.8 million net additions in January), while its customer base declined in rest of India. VIL’s active customer proportion in UP West declined from 89% in December to 75% in January, resulting in a flat active customer base at 18 million. This implies that high reported growth could be due to reporting adjustment," said Kunal Vora, senior telecom analyst, BNP Paribas.
VIL, which is in talks with potential investors since September to raise ₹25,000 crore, is focused on retaining high-paying 4G customers. It has been actively migrating its 2G users to 4G while it re-farms its existing spectrum to improve service quality.
VIL had a total of 269.8 million users as of 31 December, down from 271.8 million in the previous quarter, as per company data. The figure comprised 109.7 million 4G users, up from 106.1 million in the September quarter, indicating it lost 2G users.
“VIL shows signs of stability... VIL’s active subscriber decline has significantly decelerated. It fell only 0.3 million in December versus an average of 3.4 million in the past 12 months," said ICICI Securities in a report. “ Total subscriber base has started growing with net addition of 1.7 million," it added.
VIL’s active subscribers were at 89.63% of its total base as of January-end, compared with 97.44% at rival Bharti Airtel. Despite leading the wireless market, Reliance Jio at 79.01%, had the lowest active users among the top three telcos. Active subscribers or visitor location register (VLR) is a temporary database of users who have roamed in an area served by an operator.
Vora said Jio’s customer base in Punjab and Haryana stabilised in January after falling in December amid the farmers’ protest. Jio, a subsidiary of Reliance Industries Ltd, faced the heat of agitating farmers, who wanted the three controversial farm laws to be rolled back.
Jio added nearly 2 million customers in January, a sharp improvement from 478,917 users in December. It however, continues to struggle with slow subscriber addition to its network.
In the current fiscal, Jio’s subscriber net addition have slowed to 7 million a quarter, a 65% decline from the 20 million it added every quarter in the previous year. Jio has been losing active users.
Bharti Airtel has been leading in net wireless subscriber addition. It signed up 5.9 million users in January alone, the most since July 2019.
“Bharti saw a further acceleration in subscriber additions, as it gained 5.9 million wireless subscribers on a net basis in January as compared to the monthly pace of 3-4 million over the past six months. Bharti has led the pack for the sixth month on a trot now," Kotak Institutional Equities said in a report.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
