Telecom - Subscriber watch - Bharti regains #1 operator spot by active subs - ICICI Securities

The Telecom Regulatory Authority of India (TRAI) has released its monthly data on subscribers (subs) and MNP (mobile number portability) for Oct'20. Industry-active subs rose by 2.5mn with Bharti Airtel (Bharti) leading net add with 3.0mn subs. Mobile broadband subs addition stood at 8.1mn, with highest addition again for Bharti at 4.1mn. Bharti's MBB subs market share rose 37bps MoM to 26.8% while RJio's dipped 40bps to 51% on active basis. Bharti has regained market leader position by active subs. MNP churn remains high at 0.8% and we see Bharti poised to gain from it.

Industry-active subs rose by 2.5mn

- Industry-active subs base expanded by 2.5mn to 961mn. Sub addition has benefited from vanishing impact of SIM consolidation triggered from tariff hike.

- RJio's active subs rose by only 1.1mn to 319mn in Oct'20 (14.9mn in Q3FY20). Its subs addition has been muted compared to historic average post the tariff hike in Nov'19 (charging outgoing voice calls). Total subs addition has also been subdued at 2.2mn. Active subs, as a percentage of total subs, dipped slightly to 78.6% (84% in Oct'19). It has lost highest subs in its largest circle Bihar (dip 2.1mn MoM).

- Bharti's active subs rose 3.0mn to 320mn, most of which was driven by total subs net adds, thus indicating improving quality of subs addition. Bharti saw highest subs addition in its traditionally weak circles of Maharashtra (0.7mn) and Gujarat (0.5mn).

- VIL's active subs continued to decline, but at lower pace; fell 1.2mn resulting in an active subs base of 260mn in Oct'20. Total subs base shrunk by 2.7mn.

- RJio's active subs market share was largely flat at 33.2% MoM, Bharti's was at 33.3% (up 23bps MoM) and VIL's dipped 20bps MoM to 27.1%.

Industry MBB (mobile broadband) subs rose 8.1mn led by strong growth for Bharti

- Industry-wide MBB subs rose by 8.1mn to 713mn in Oct'20. The growth was led by continued strong net add for Bharti at 4.1mn. RJio's net add has been losing steam, and this may also hasten the launch of low-end smartphone.

- RJio's MBB subs base grew by only 2.2mn to 406mn. Adjusted for inactive subs, its MBB market share stood at 51.0% (down 40bps MoM) while Bharti's was 26.8% (up 37bps MoM) and VIL's 19.3% (down 11bps MoM).

- VIL's MBB subs rose by 0.6mn to 120.5mn, which continues to disappoint.

RJio's wired broadband subs increased by 0.18mn to 1.7mn

- Wired broadband subs net add came in at 0.39mn MoM to 21.5mn (1.8% MoM and 12.7% YoY growth) in Oct'20.

- RJio's market share under this parameter improved to 7.9% (up 71bps MoM), and net add stood at 0.18mn (vs 0.27mn in Sep'20). Bharti's net add was stable at 0.07mn; and market share improved marginally to 12.4%. Others (local service providers) continued to lead net add at 0.19mn in Oct'20.

Industry MNP churn rate at 0.8%

- Industry porting was high at 8.8mn in Oct'20. MNP churn rate was steady at 0.8% (vs 0.5% pre-Covid).

Active subs: Industry add 2.5mn subs

Active subscribers, or visitor location register (VLR), is a temporary database of subs who have roamed into the particular area that an operator serves. Each BTS is served by exactly one VLR, hence, the unique registration. VLR data is calculated on the basis of active subs in VLR on the date of peak VLR of a particular month for which the data is being collected. This data is collected from switches having a purge time of not more than 72 hours.

Source : Equity Bulls

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