Home >Markets >Mark To Market >In telecom's three-horse race, one is slipping, badly

The telecom sector has seen its visit location register (VLR) improve by 4.6 million in July after two consecutive months of decline, providing relief for investors in telecom stocks. This comes on the back of a gradual reopening of the economy across the country.

VLR is a metric that reflects the number of active subscribers on a mobile network.

There were 989 million active subscribers in July, showed data from the Telecom Regulatory Authority of India (Trai).

Reliance Jio had the highest additions of 6.1 million active subscribers among the three telecom companies. This is a significant jump from June when 2.4 million active subscribers were added, taking Jio’s active subscriber base to 346 million.

Neck and neck
View Full Image
Neck and neck

“This was mainly supported by a strong performance in the rural market, with 3.5 million subscriber additions, estimated to be from JioPhone. 4G additions too were strong at 6.9 million. RJio gained 40 basis points (bps) in active subscriber market share and now shares market leadership position with Bharti (Airtel)," analysts at Motilal Oswal Financial Services Ltd said in a report. One basis point is one-hundredth of a percentage point.

Close competitor Bharti Airtel Ltd saw its active subscriber base growing by 2.3 million in July. The company has returned to the trend of active subscribers exceeding total subscriber additions, after two months, analysts noted.

“Bharti (Airtel) and Jio are now tied at 35% market share on the VLR front, gaining at a similar pace over the past one year," analysts at Kotak Institutional Equities said in a report.

However, “Bharti Airtel’s performance was somewhat mixed as it gained market share in seven circles and broadly maintained its position in four circles, while losing in the remaining 11", they added.

Vodafone Idea Ltd (Vi) remained a laggard with a decline of 3.3 million in its active subscriber base in July. The pace of deceleration has reduced from June, but there is little hope to restrict subscriber loss unless the company ramps up network investments by raising funds.

As far as Bharti Airtel and Vodafone Idea are concerned, subscriber trends from now on will be a key factor to watch, with the tariff hike in minimum recharge plans from July-end, analysts at Emkay Global Financial Services Ltd noted.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Edit Profile
My ReadsRedeem a Gift CardLogout