Reliance Jio’s broadband user base drops for the first time in five months

The number of wired broadband users of Reliance Jio Infocomm Ltd. dropped for the first time since the billionaire Mukesh Ambani’s telecom unit marched into the segment five months back.

The carrier’s home broadband users fell by 20,000 over the previous month to 8.4 lakh in January, according to the latest data released by the Telecom Regulatory Authority of India. In comparison, Bharti Airtel Ltd. reported a steady growth for the third straight month.

Reliance Jio in September last year forayed into the broadband segment, dominated by state-run Bharat Sanchar Nigam Ltd. and Mahanagar Telephone Nigam Ltd. with 50 percent of the share, with tariff plans for JioFiber service starting at Rs 699 a month. That’s in contrast with its aggressive entry into the mobile segment more than three years ago. The operator offered free unlimited 4G data and voice services, triggering a brutal tariff war that either drove out smaller rivals or triggered consolidation.

In the mobile space, Reliance Jio, however, continued to add most paying subscribers among peers. The telecom operator added nearly 50 lakh active users—a metric that matters more—in January. Still, its ratio of active to total users remained lower at 82.3 percent against the industry average of 85.3 percent.

Peers Bharti Airtel and Vodafone Idea Ltd. lost active subscribers in the reported month. The Kumar Mangalam Birla-promoted carrier has been losing such users for nearly two years now. The decline in January, however, was the lowest in 14 months.

Bharti Airtel and Vodafone Idea’s active subscriber ratio stood at 95.4 percent and 90.4 percent, respectively, in January.

A higher active subscriber base doesn’t necessarily mean better revenue. But it at least means that a customer is frequently using the service and the risk of losing that user is low.

The Sunil Mittal-controlled service provider, however, continued to ramp up its user base in the mobile broadband space. It added 43.6 lakh broadband users—who predominantly use data and are high revenue generating as voice service is now free in India—in January. That’s because of improved network, competitive plans and better customer service.

Vodafone Idea, however, lost such subscribers for the second month in a row. That’s on account of deteriorating network quality, possibly due to network integration issues.

―Bloomberg Quint