Mumbai helps Voda Idea add 1.56 mn subscribers after 20 months

Though Vodafone Idea Limited (VIL) is by no means over the hump yet, for the first time since October 2019, the telco has shown positive subscriber net additions, totting up 0.7 million subscribers in February 2021. This has been thanks to a 1.56 million rise in net subscribers in Mumbai, which represents a sharp 18 per cent increase month on month.

The company’s subscriber base in Mumbai went up from 8.9 million in January this year to 10.47 million in February.

The numbers would be a relief for VIL. However, the increase in its net adds is not universal across circles — it lost subscribers in 14 of the 22 circles while gaining only moderately in the other seven. At the same time, its net subscriber additions have gone up in important circles like Delhi (2 per cent) and Haryana (1.3 per cent), amongst others.

However, VIL’S wireless broadband (4G) net additions of 0.6 million in February is far lower than that of its key rivals Airtel and Jio. This has an impact on the overall ARPU (average revenue per user) of the industry, since VIL’S large 2G and 3G customers base means that their spends are far lower than that of 4G customers. What’s more, VIL’S growth markets in Mumbai and Delhi could be under stress post April when both cities were hit hard by the second wave of the pandemic.

The good news for the industry is that the 8.6 million total net addition of subscribers in February (when all three private telcos were in the positive zone) is the highest after more than 12 months. This was largely because economic activity had bounced back at the time and companies saw substantial growth in demand. While most telcos say that they had a good number in March as well, the business is expected to slide in April, with the onset of the second wave of the pandemic.

Reliance Jio has again wrested leadership in net subscriber additions after August last year, bagging 4.3 million net adds in February, which is nearly double of the previous month. As for Bharti Airtel, it has lost the top slot, with net additions going up by 3.7 million in February, which was much slower than the previous month.

Jio’s winning streak could continue. According to Kotak Institutional Equities, based on Jio’s numbers declared for the fourth quarter of FY21, the telco’s net additions will double in March to around 8.6 million subscribers.

The reason for this is probably the relaunch of Jiophones — the feature phones with long tenure plans which has been a key instrument of Jio’s strategy to get 500 million customers. According to analysts, the new phone scheme, which was launched in March 1, could have garnered 1.5 -2 million additional subscribers.

While Bharti has said that it would not go for any bundling of phones, it has continued to post strong net additions of mobile broadband subscribers (4G customers) — 3.5 million in February 2021. This is just a tad lower than net subscriber additions by Jio (4.3 million) over the same period.

J M Financials has projected that cumulatively, the total 4G net additions for the two months of February and March should hit 9 million. And as all of them are active or paying subscribers, an increasingly larger share of 4G subscribers in the total subscriber base will ensure that most of the tariff hikes flows through in higher ARPUS.