Forthcoming Telecom Regulatory Authority of India figures are expected to show former market leader Bharti Airtel slipped to third-place behind Reliance Jio in terms of subscriber numbers during January, the second slide for the operator in less than 12 months.
Airtel lost its top billing in August 2018 after Vodafone India and Idea Cellular completed a merger that created the largest operator in India by subscribers. But it is Jio’s organic growth which now puts the operator’s second-place under pressure.
The startup operator picked up 27.9 million subscribers in its fiscal Q3 (calendar Q4), giving it a total of 280 million at the end of 2018. Airtel, meanwhile, shed nearly 49 million subs during the quarter, ending December with 284 million following a campaign to reduce the number of low-value subscribers.
In October 2018, Airtel eliminated lifetime free incoming calls service for prepaid customers, introducing minimum recharge packs for subscribers to keep their lines active, Fitch Ratings noted in a research report. The move saw monthly ARPU increase 4.1 per cent sequentially to INR105 (1.47).
Airtel’s year-on-year subs fell just 2 per cent in calendar 2018.
As Jio reaches a critical mass of subscribers, Fitch Ratings expects competitive pressures to gradually ease and margins to improve slightly, with all operators seeking to focus on higher-value services.
But it reckons Airtel’s efforts to transition away from its core low-cost strategy by focusing on network improvements will be undermined by sustained price competition.
Fitch Ratings noted the big issue for Airtel is that voice revenue is declining more rapidly than data ravenue is growing. Its mobile service revenue fell 11.3 per cent year-on-year in 2017 and 19.1 per cent year-on-year in 2018.
The agency sees an opportunity for Airtel to continue to expand its mobile data subscriber base, which accounted for less than 40 per cent of total subs at the end of 2018.
During the year it invested heavily to upgrade base stations to be broadband-capable: in fiscal Q3 it reported 94 per cent of its towers were 3G or 4G activated.Subscribe to our daily newsletter Back