Signals of change
Does Reliance Jio continue to be a disruptor for the telecom sector as it prepares for a possible initial public offering some six years after its commercial launch? Is it still a Reliance-versus-therest battleground in the telecom industry? And, is the industry angst against Telecom Regulatory Authority of India, or Trai, for allegedly giving a free hand to Jio any less now?
It may be tough to find an accurate answer to these questions but subscriber numbers and financial data aggregated by the regulator over the last few years capture quite a few trends. Apart from the rise and rise of Jio, the overall minutes of phone and internet usage have risen sharply across the industry. Also, India and Bharat have come close to each other in terms of the use of wireless telephony including the internet.
From the industry’s perspective, the average revenue per user (ARPU) per month has been dropping annually, though things have been different after telcos raised tariffs. Subscribers haven’t complained about the low tariffs all this while even as the industry screamed that ‘’predatory’’ pricing by Jio stopped others from increasing rates. The other risk that the sector faced was that of an almost duopoly that could have resulted in the erosion of competition. For the moment, that risk is averted after a government package last year, but the industry has been inching towards duopoly for some years. And all of that may not be because of the disruption caused by Jio.
The Trai performance indicators for the quarter ending December 2015 listed out 12 telcos, including state-owned BSNL and MTNL. Reliance Jio was yet to launch commercially at this point. Bharti Airtel topped the wireless space with a market share of 24.07 per cent, followed by Vodafone (on its own then) at 19.15 per cent and Idea at 17.01 per cent. Other private firms in the list included Tata Tele, Telenor, Aircel, Reliance Communications, Sistema and Videocon.
The landline scene had BSNL as the dominant leader at 59.31 per cent, followed by Bharti Airtel at a very distant 14.10 per cent. Then there were numerous others. The overall industry ARPU was still going up at ~123 per subscriber per month. The wireless broadband numbers were inching up, settling at a modest 136.53 million with Bharti Airtel at the highest spot with a market share of 23.07 per cent. Gross revenue and adjusted gross revenue were also increasing to touch ~65,347 crore and ~46,087 crore, respectively, in the quarter ending December 2015.
Switch to two years later. In the quarter ending December 2017, monthly ARPU of wireless players was at a little over ~80, quite a decline from the ~123 in December 2015. The gross revenue and the average revenue too had dropped 8 per cent and 16 per cent from the year ago period. But there was something that was increasing substantially — internet subscribers were at 445.96 million. Jio had launched commercially in 2016 and the disruption was showing. The leaders at that time, such as Bharti Airtel and Vodafone, were growing their subscriber base in low single digits from the previous quarter, while Jio’s customer base grew by 15.49 per cent. Jio’s market share was 13.45 per cent, against Bharti’s 24.6 per cent and Vodafone’s 17.8 per cent. Not just that, Jio had already risen to the top slot in wireless internet with a market share of 37.7 per cent by December 2017.
One year down the line, in December 2018, internet subscribers were going up swiftly to touch 604 million. It’s the wireless ARPU that was hitting a new low of ~70, down 11.78 per cent from the same time previous year. While minutes of usage were increasing, gross revenue and AGR were down 3.43 per cent and 6.44 per cent, respectively. In terms of market share, Vodafone Idea, after merging with Idea, was on top with 34.98 per cent of the market, followed by Bharti at 28.74 per cent and Jio at 23.38 per cent. The following year, Jio was the new leader with a market share of 31.65 per cent in December 2019, followed by Voda Idea at 28.4 per cent and Bharti Airtel at 28.28 per cent. Most other private players were already out and the remaining didn’t matter much.
The December 2020 data shows wireless ARPU was moving up again, to touch ~101.65. It had risen 29.24 per cent annually. Gross revenue and AGR were up as well by as much as 12.27 per cent and 16.5 per cent, respectively. While Jio had by now established itself as the top telco with 35.43 per cent market share, Bharti Airtel had raced up to second position with 29.36 per cent share, overtaking Voda Idea, which was left with 24.64 per cent share. Also, urban and rural wireless were coming close to each other with 53.64 per cent and 44.65 per cent share by now.
The subscription data for December 2021 reflects the previous year’s trends. Jio’s wireless market share was up slightly to 36 per cent from 35.43 per cent a year ago. Similarly, Bharti Airtel’s share was up to 30.81 per cent from 29.36 per cent a year ago and Voda Idea lost a bit to touch 23 per cent from 24.64 per cent the previous year.
Trai’s latest quarterly performance report, for the period ending September 2021, put the broadband Internet subscriber base at 794.88 million. As for wireless ARPU, it rose by double digits year-on-year to reach ~108.16, which is still below the ~123-mark in December 2015.
The telecom industry could take a few more quarters to come to the pre-jio ARPU level. It’s been quite a fight, and telcos must move on to doing what they should: Offer quality service, whatever it takes.