Jio, Airtel gain market share in May at the cost of Vodafone Idea

Normally, in the monthly market share numbers that the Telecom Regulatory Authority of India (TRAI) puts out, there is a standard protocol that is followed. While Jio and Airtel tend to witness an accretion in their subscriber numbers, Vodafone Idea and BSNL bear the brunt of the loss of market share. With the telecom markets getting saturated at a macro level, there is a lot more of market share cannibalization that is happening currently. The latest month of May 2022, for which the data is out, is no different from the regular months.

For the month of May 2022, India’s largest and most predominant telecom player, Reliance Jio Infocomm has added another 31.11 lakh mobile subscribers. This not only consolidates its leadership in the telecom and digital space but also widens the gap with competition. Bharti Airtel also managed to boost to customers in May by 10.27 lakh users on a net basis. At the close of May, while Jio Infocomm had over 48 crore active subscribers, the number was 36.21 crore customers in the case of the second largest player; Bharti Airtel.

But in a saturated telecom market, market share gains come normally from cannibalization and that is what was evident. While there have been fresh customers onboarded in the month of May 2022, there has also been substantial cannibalization of market share. For example, Vodafone Idea lost 7.59 lakh wireless subscribers leading to its subscriber base sliding lower to 25.84 crore during the period. Even BSNL and MTNL saw depletion in the number of subscribers, although they have a much smaller share in the wireless business.

As of the close of May 2022, the wireless telecom industry was clearly dominated by the private sector. The private telecom service providers had collectively cornered over 89.8% market share of the wireless subscribers market. On the other hand, the two pioneers viz BSNL and MTNL, held the residual market share of 10.1%. In the wireless business, the private players have not only been more aggressive and service conscious, but they have also been aggressive and continuously invested in the network to improve voice quality.

Most of the states in India have evinced a growth in the subscriber base for the month of May. However, a few select telecom circles like Assam, West Bengal, Kolkata, Kerala, Himachal Pradesh and Haryana have evidenced negative growth rate in subscribers during the month. There were a total of 79.7 lakh mobile number portability (MNP) requests made in May 2022 and the cumulative MNP requests since inception now stands at a whopping 70.55 crore. MNP was implemented the year 2010 and allows you to retain the number.

The big challenge from these numbers is for Vodafone Idea. The company already has a negative net worth of Rs-80,000 crore and it has paid Rs2,200 crore as earnest money deposit for the 5G auctions in late July. The question is how would it be able to sustain with such huge accumulated losses and falling subscriber base. Normally, subscriber migration tends to happen in hordes and then becomes a cycle. Limited subscribers limits investments and that limits service quality and you end up losing more customers. It is vicious cycle.