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Telecom tariff hikes drive SIM consolidation: Report

Thursday - February 27, 2020 10:42 am , Category : BUSINESS
New Delhi, Feb 27 (IANS) Telecom tariff hikes from December last year has led to consolidation in the market leading to gross subscriber fall, said a report from Motilal Oswal.
After declining by 2.1 million in November 2019, the number of declines in active subscribers increased again by 3.5 m in December 19. The trend comes on the back of IUC charges imposed by RJio in October 19 and a major unanimous price hike (25-30 per cent) in December 19. Gross subscriber base declined by 3.2 m (-0.3 per cent MoM) to 1,151 m, as against addition of 3-4 m in the recent past.
Bharti's gross subscriber base stood flat and RJio added mere 0.1 m subscribers. VIL's gross subscribers declined by 3.6 m, possibly due to customers discarding non-functional SIM cards post tariff hikes.
As per the Telecom Regulatory Authority of India (TRAI), industry gross subscriber base declined by 3.2 m (-0.3 per cent MoM) to 1,151 m, led by VIL (-3.6 m). Bharti's gross subscriber addition stood nil, whereas RJio added mere 0.1m subscribers, clearly reflecting SIM consolidation post tariff hikes.
Surprisingly, RJio has again added 3 m active subscribers in December (after losing 2.4 m in Nov 19 for the first time since it began its operations). Bharti added 1.4 m active subscribers (v/s 3.7 m in Nov 19), whereas VIL lost 1.1 m.
Further, Bharti has remained at third position in gross market share (28.4 per cent), however, it maintained its top position in active subscriber market share with 32 per cent, followed by RJio (31 per cent) and VIL (30.3 per cent).
VIL lost 3.6 m gross subscribers MoM (v/s a loss of 36.4 m in Nov19) to reach a base of 333 m. It lost 1.1 m (v/s loss of 3.1 m in Nov19) active subscribers to 298 m with market share contracting to 30.3 per cent (v/s 30.5 per cent in Nov 19), largely due to sub-par network.
RJio's gross subscribers increased by 0.1 m MoM to 370 m (market share: 32.1 per cent). Active subscriber addition stood at 3 m, but this was much below 7-8 m adds until 2QFY20; active subscriber market share improved by 20bp MoM to 31 per cent.

--IANS ana/skp/