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Bharti Airtel gains the most as telecom churn doubles during pandemic

Bharti Airtel Ltd. gained the most as the churn rate in India’s telecom sector doubled during the pandemic.

The sector’s mobile network portability churn rate rose to 1% in February compared with 0.5% a year earlier, according to Telecom Regulatory Authority of India data. The average during the period was 0.6%.

And despite offering costlier tariffs than Reliance Jio Infocomm Ltd., Bharti Airtel added the most active subscribers during the period. It added twice the number of regularly paying users compared to Jio. Vodafone Idea Ltd. lost both gross and active users.
The churn rate spiked in February with month-on-month portability requests jumping to 11.7 million. That’s twice the 12-month average of 6.8 million. According to a BNP Paribas report, the spike came because the companies increased incentives to win over users starting February.

In all, 82.3 million number portability requests were filed in 22 circles in the year through February. Most of these came from Maharashtra, Uttar Pradesh (East), Madhya Pradesh, Uttar Pradesh (West), and Gujarat—the five circles that accounted for 45.9% of the total churn.

The top 10 circles accounted for 75% of the requests. Bharti Airtel gained 16.98 million active subscribers in these regions, followed by Jio’s 11.44 million. Vodafone Idea lost 28 million active subscribers in the 10 circles.

Bharti Airtel added higher active subscribers even though its plans are priced at a premium to Jio’s. Its entry-level 1GB daily pre-paid data plan is available at Rs 199 compared to Jio’s Rs 149.

Dolat Capital, in a recent report, increased subscriber estimates for Bharti Airtel by 5.6% and 8.1% for FY22 and FY23, respectively, citing “superior execution” and market share gain in the fourth quarter. “Bharti remains best-positioned to capitalise on the potential upside from the weakness of Vodafone Idea and/or tariff hikes.” BloombergQuint

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