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MOSL: TELECOM SUBSCRIBER WATCH (MAY 2017)-Industry active subscriber addition recovers led by RJio

​Telecom subscriber watch MAY-2017: Industry active subscriber addition recovers led by RJio

The Telecom Regulatory Authority of India (TRAI) has released the monthly subscriber data for the month of May 2017. Active (VLR) subscribers in the industry increased by 4.6m to reach 1,020m in May, after declining by 1.5m in the previous month due to the commencement of RJio’s paid services. Apart from RJio (+8.7m), Bharti (+1.5m) was the only player to have recorded active subscriber addition. Bharti’s active subs market share improved 10bp to 26.5%, while RJio gained 80bp to reach 8.7%, largely at the cost of smaller players, which lost 60bp. This is in line with our view that RJio is likely to gain from subscribers shifting from second SIM usage to RJio’s prime subscription. RJio’s VLR in May improved 450bp MoM to 75.7%, indicating some stability after a 200bp decline in April. Industry’s mobile broadband (MBB) subs net adds at 7.4m remained stable, led by RJio’s 4.8m adds. RJio continues to lead the MBB subs market share at 43%; however, adjusted for inactive subscribers, RJio’s MBB subs market share stands at 36.4%. We continue believing that Bharti has the wherewithal to perform well in the current hyper-competitive market.

Industry witnesses recovery in active net subs adds

• ​After declining by 1.5m in April due to RJio’s paid service launch, the telecom industry’s active net subs increased by 4.6m in May 2017. Region-wise, Bihar, UP (E) and West Bengal remained the major gainers, with growth led by RJio and Bharti.
  
• Operator-wise, RJio added 8.7m active subs to reach 88.9m, largely at the cost of smaller operators, which lost 5m active subs. Vodafone and Idea too cumulatively lost 0.5m active subs. This could be the outcome of subscribers shifting from second SIM usage to RJio’s prime subscription. In our view, it will be key to see RJio’s subs retention as it gradually increases ARPU beyond June 2017.
  
• Bharti (+1.5m to 270m) was the only operator other than RJio to gain active subs.