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Adverse impact of tariff hike on Bharti’s subs add is limited, ICICI Securities

May 12, 2023

The Telecom Regulatory Authority of India (TRAI) has released its data on subscribers (subs) for Feb’23. Industry-wide active sub base rose by 2.8mn MoM (vs rise of 3.9mn in Jan’23 and rise of 1.9mn average in past six months) with Bharti Airtel (Bharti) adding 0.8mn subs (vs 1.7mn in past six months); it was adversely impacted by the rise in minimum recharge. The adverse impact on Bharti’s active subs add appears to be limited. Reliance Jio’s (RJio) active subs rose 3.2mn in Feb’23 (vs +2.0mn in past six months). VIL saw its active subs decline by 0.8mn. Industry-wide mobile broadband (MBB) sub net add was 0.5mn (vs +4.7mn in past six months). Bharti’s MBB subs rose 2.2mn and its market share expanded to 30.1% (up 18bps MoM) on active basis, while RJio’s rose 23bps to 51.3%. MNP remains elevated at 11.2mn (though it has dipped slightly MoM) with churn rate at 1.0%.

Industry-wide active sub base rose by 2.8mn MoM in Feb’23

Industry-wide active sub base rose by 2.8mn to 1,028mn (up 0.3% MoM, +1.1% YoY).
RJio’s active sub base jumped 3.2mn (average +2.0mn in past six months) to 398mn in Feb’23. Total subs rose by 1.0mn to 427mn, and active subs as a percentage of total subs improved to 93.1%, up 52bps MoM.
Bharti’s active sub base rose 0.8mn (vs +1.7mn in past six months) to 367mn. Its total sub base increased by 1mn. Bharti has solely increased its minimum tariff from Rs99 to Rs155 in multiple circles, and its adverse impact on Bharti’s active subs add appears to be limited.
VIL’s active subs dipped 0.8mn (down by an average of 1.3mn per month in the past six months) to 208mn in Feb’23. Total subs reduced by 2.0mn.
RJio’s active sub market share rose 20bps MoM to 38.7%, Bharti’s stood at 35.7% (flattish MoM) while VIL’s fell 13bps MoM to 20.3%.

Industry-wide MBB (mobile broadband) subs rose only 0.5mn

Industry-wide MBB subs stood at 805mn, up 0.5mn, in Feb’23 (up 0.1% MoM / 6.6% YoY) vs past six months’ average net add of 4.7mn MBB subs.
Bharti’s MBB sub base grew 2.2mn to 234mn, which will aid premiumisation, benefited by rural expansion. It will help sustain a decent ARPU growth in the absence of a tariff hike.
RJio’s MBB sub base rose 1.0mn to 427mn. Adjusted for inactive subs, its MBB market share stood at 51.3% (up 23bps MoM). Bharti’s MBB market share was 30.1% (up 18bps MoM) and VIL’s was 15.9% (down 22bps MoM).
VIL’s MBB sub base dipped 1.3mn in Feb’23 to 124mn, which is disappointing.

Wired broadband sub net add dipped for RJio, stable for Bharti

Wired broadband sub base dipped 0.29mn MoM to 32.8mn (down 0.9% MoM / 23.2% YoY) in Feb’23. Bharti added 0.13mn subs (vs 0.14mn per month in past six months), and RJio added 0.18mn (vs 0.26mn per month in past six months). Other operators’ sub base rose 0.04mn to 14.2mn.
RJio’s market share rose to 24.4% (up 76bps MoM) and that for Bharti increased to 18.2% (up 55bps MoM). BSNL’s sub base declined by 0.64mn and its market share dipped 184bps MoM to 10.8%.

Industry-wide MNP churn slightly dipped to 1.0%, down 10.1% on MoM basis