Telcos consolidation takes toll on India’s telephone subscriber base

Key Highlights

• Total tele subscribers amounted to 120.67 crore in September.
• Wireless and wireline subscribers in September stood at 118.30 crore and 2 crore respectively.
• MNP requests during the month reached 54.9 lakh.

Telephone subscriber base in India, inclusive of both wireline and wireless subscribers, has been on a marginal decline in the past couple months.

Wireline subscribers have been fading away for a long time now however wireless subscribers have also started decreasing. From a positive net addition every month up till June to negative monthly growth rate in September, as per Telecom Regulatory Authority of India’s (TRAI) latest data.

“The urban subscription declined from 707.33 million (70.73 crore) at the end of Aug-17 to 704.89 million (70.48 crore) at the end of Sep-17, and the rural subscription also declined from 502.28 (50.22 crore) million to 501.82 million (50.18 crore) during the same period,” TRAI said.

In September this year there were a total of 120.67 crore subscribers in India. This was slightly lower than August (120.96 crore) and July (121 crore).

The break up of wireless and wireline subscribers in September stood at 118.30 crore and 2 crore respectively.

Months prior to June however registered positive monthly growth rate in adding telephone subscribers.

So what has changed in the past three months in the telecom sector you ask?

“Most of the subscriptions decline can be attributed to consolidation among operators over the last twelve months,” said Neil Shah, Research Director at Counterpoint Research told Zeebiz.

Debt riddled telecom operator, Reliance Communications was downgraded in May this year to ‘default’ by rating agencies.

The company then unveiled its plan to merge its wireless business with Aircel. However that plan also fell through on the back of ‘unregulated delays’.

Since RCom, there have been a lot of consolidations between companies with the biggest one of Idea and Vodafone in the mix. Idea-Voda merger is expected to see completion only next year however the companies have begun the process.

Last week, Tata Teleservices begun transitioning its subscribers onto Airtel’s network.

The telecom industry is expected to dial down to just a five player market in a few years.

Although consolidation in the market was accelerated due to the entry of Reliance Jio, plans to wean out smaller subscribers has been on the agenda for a while now.

“As operators merge or being acquired we can see churn, deactivations of connections which would become inactive as part of due diligence and also competitors targeting those potential subscribers to move to their network and are in process of MNP requests,” Shah added.

The number of mobile number portability requests received by all operators in the month of September amounted to over 54.9 lakh. Jio saw the most number of ‘net additions’ to its site of over 59 lakh during the month.

“The most companies you can see impacted are the troubled operators MTS, Telenor, RCOM, Idea and Aircel as a result of onslaught from Jio’s offerings and Airtel’s acquisition spree,” Shah said.

Jio that debuted into the market with its freebie offerings has kept the competition alive in the industry which has now turned to a brutal game of survival. Following in its footsteps, other incumbent operators began offering free calls on roaming and more data benefits.

However there is still hope for the embattled sector that has seen enough churn in just a year’s time.

“By next year second half we should see market reaching a steady state as most users find their operators of choice for long and operators also target smart bundled offerings to reduce churn and drive up stickiness for long term,” Shah added.