India mobile subs continue to climb as fixed falls

Mobile subscriptions are continuing to rise in India, though the fixed market is increasingly looking prime for disruption as the number of users falls once again.

According to the latest data from the Telecom Regulatory Authority of India (TRAI), mobile subscriptions across the country increased by 0.31% over the three-month period ending in June. Although this might not sound that impressive, 0.31% is the equivalent of 3.65 million subscriptions. The total now stands at 1.165 billion.

The impact of Jio should not be underestimated here. This is a company which revolutionised accessibility to connectivity in the country, and momentum is continuing through 2019. At some point the ceiling will be reached, though in many countries around the world, mobile penetration exceeds 100%.

With a population of roughly 1.33 billion, smartphone penetration across the country stands at approximately 87%. There are of course factors in play which distinguish India from other markets, though there is certainly still more room for growth in the market.

Interestingly enough, while mobile is surging, demand for fixed broadband services is declining. The number of ‘wireline’ subscriptions across the market decreased by 5.47% to 21.17 million. There are roughly 250 million households in India demonstrating the vast room for growth in the country.

Country Number of households Broadband subscribers Penetration
India 249.5 million 21.17 million 8.4%
China 455.9 million 378.5 million 83%
US 138.5 million 109.8 million 79.2%
UK 31.8 million 26 million 81.7%
Japan 49 million 40.4 million 82.4%

As you can see from the table above, the number of broadband subscriptions does not tend to exceed the number of households, but 80% penetration seems to be a fair estimate in the more developed markets.

Due to the vast size of the country and the environmental challenges which are presented, there is perhaps good reason this market penetration is so low. Another factor to take into account is ARPU compared to the heightened expense of deploying a fixed network compared to mobile. These are all factors to consider, but for a company which can balance the equation, the opportunity is clear.

Jio is one of those which is attempting to crack the fixed market.

Having secured the attention of the Indian consumer, it will surprise few the ambitious Jio is seeking to compound this success with a venture into broadband. Last October, the firm announced it had acquired stakes in Den Networks and Hathway Cable to put one foot through the door, though it has not made the blockbuster move some are anticipating.

India has been one of the most interesting markets for telecommunications over the last few years, but there is plenty left to discuss if someone can figure out how to crack the broadband conundrum.

Jio leapfrogs Idea and Vodafone for second place in India

The Telecom Regulatory Authority of India (TRAI) has unveiled the monthly growth statistics for July and India is still the market which keeps giving.

Looking at the wireless segments to start with, Jio is once again dominating. Overall, the market grew by 10.5 million subscriptions taking the total to 1.15 billion. This number is already pretty staggering, though when you consider the total population of the country is over 1.3 billion there is still room for growth. In most developed markets the mobile penetration (the total number SIM cards) exceeds 100% of the population, while there are numerous cases of this percentage going north of 110%. Looking at these statistics in the simplest of terms, there is still potential for another couple of hundred million subscriptions in the country.

Of course, Jio is capitalizing most from the insatiable appetite of the Indian digital society. When looking at the total number of subscriptions secured by the telcos, Reliance Jio captured roughly 91% of the new customers, boosting its subscription base by 11.7 million. Amazingly, the 609,000 subs captured by Vodafone or the 313,000 attributed to Bharti Airtel are nothing more than footnotes; how many markets are there were you could say that!

The end result is continued momentum for Jio. As you can see below, Jio has leapfrogged both Vodafone and Idea in the market share rankings. That said, with the much-anticipated merger on the horizon it won’t be long before the combined entity hits top spot.

Telco Net Adds Market Share
Reliance Jio 11,796,630 19.62%
Vodafone 609,974 19.3%
Bharti Airtel 313,283 29.81%
BSNL 225,962 9.8%
Idea 5,489 19.07%
MTNL -9,914 0.3%
Reliance Communications -31,814 0.004%
Tata -2,357,690 2.1%

Perhaps the most amazing aspect of these statistics is in the broadband market however. The staggering growth of the mobile segment will continue for at least the short- to mid-term future, though with a total of 22.2 million broadband subscribers there is an incredible opportunity for the right offering.

Just to put these numbers in perspective, the broadband would have to grow 50-fold to even come close to the same scale as mobile. Admittedly, it significantly more expensive to invest in infrastructure for a future-proofed broadband network in comparison to mobile, but this is an area which seems primed for the right disruption.

Of course, with disruption comes uncomfortable truths. Jio might be on an upward trend, collecting subscriptions and hiring generously, though the consequence of this disruption has been market consolidation. In the most general terms possible, consolidation is never a positive for the job market, while the Financial Express is reporting job losses of 50,000-75,000 in the Indian telco market across 2018.