Reliance Jio Outpaces Airtel In Active Subscriber Base Amid 5G Rollout

Reliance Jio Infocomm Ltd. added the highest number of active users in January, as a 5G-induced churn in India's telecom industry deepened.

The telecom venture of India's richest person added a net 3.5 million active users in the first month of the year, according to data released by the Telecom Regulatory Authority of India. That compares with 1.3 million net addition by Bharti Airtel Ltd. and 0.5 million decline at Vodafone Idea Ltd.

Reliance Jio now controls 38.5% of India's active user base of 1,024.81 million, followed by Airtel and Vodafone at 35.5% and 20%, respectively, the TRAI data showed.

The Bharti Group company, however, outpaced rivals on 4G additions.

Airtel added a net 2.8 million wireless broadband data subscribers over the previous month to grow its user base to 237.40 million in January, according to a Morgan Stanley report citing TRAI data. This could be due to 5G rollouts that may have prompted users to buy more SIM cards. Jio added 1.7 million 4G users in January, and Vi added 1.1 million.

About 806 million Indians now have access to broadband internet over the phone.

"After two-quarters of underperformance on active subscribers, Jio's outperformance comes as a key positive," Jefferies said in a brokerage report. "This coupled with Bharti's market share gains among 3G and 4G subscribers, bodes well for the tariff outlook."

Net Zero Impact

The gains in market share by Reliance Jio and Bharti Airtel, at the expense of subscriber losses at Vi and Bharat Sanchar Nigam Ltd., come at a time when the wider industry has stagnated.

The total number of wireless subscribers in India rose by 0.01% month-on-month to 1,143.02 million in January 2023, according to TRAI data. That's still 25 million less than the figures from November 2021, when telecom operators were affected by a tariff hike. Monthly growth rates in urban and rural areas were 0.02% and 0.00%, respectively.

Still, there is visible churn in the market.

In January, the number of requests to transfer mobile numbers stayed high at 12.40 million, indicating intense competition to gain subscribers.

"We expect Airtel and Jio's market-share gains to accelerate at Vodafone Idea's expense, especially among premium subscribers," driven by pan-India 5G rollouts, Kotak Institutional Equities said in an April 3 note. Vi's cash constraints and a hazy fundraising picture simply play into their hands.

"Overall, we expect subscriber trends to remain muted in the next few months due to the sharp increase in minimum recharge plans by Bharti," Kotak said in the note. "Further, a delay in the tariff hikes could lead the sector to an effective duopoly."