Jio bags another 10 million – how was your October?

The Telecom Regulatory Authority of India (TRAI) has released the subscription data for October and it’s another familiar story as Reliance Jio grows its subscription base again.

Looking at the market on the whole, India now has 1.17 billion wireless subscriptions, having added another 720,000 during October. Amazingly, market penetration is now up to 87%. While growth has been staggering since Reliance Jio shunted the status quo, if the country follows what would be considered the traditional trend (mobile penetration eventually exceeding 100% of population) there are still a couple of hundred million mobile subscription to realise.

Unsurprisingly, Reliance Jio has greedily devoured almost all of the positive growth.

Subscription growth Market share
Reliance Jio 10,500,227 22.46%
BSNL 386,926 9.7%
Reliance (3,831) 0.002%
MTNL (8,068) 0.3%
Tata (925,299) 1.8%
Bharti Airtel (1,864,065) 29.2%
Vodafone Idea (7,361,165) 36.55%

With only BSNL, India’s state-owned telco, heading upwards Reliance Jio has firmly placed itself in the strongest position across the market. Bharti Airtel is in somewhat of a downward spiral and it’s difficult to see how it will get itself out of this position, therefore eyes will be cast towards Vodafone Idea for resistance to the Reliance Jio tsunami which is sweeping India.

Looking at these figures alone paints a relatively dreary picture, though you have to appreciate the complicated process the business is currently undertaking. The merger between Vodafone and Idea, which was caused by the jittery upstart Jio, is going through the rationalisation period right now. This is a very complex time and will define the firm’s ability to tackle the Reliance Jio headache in the months to come.

On the money side, we do not foresee this being a massive issue. Vodafone and Idea are merging two massive networks and will soon enough realise the benefits of scale. The subscriber base is massive, providing security for any future investments, and the sale of various different assets (such as the respective tower businesses) provides a hefty war-chest. Taking these factors into account, money should not be an issue, so we have to wonder whether the right people will be put into the right roles and if the right (and flexible enough) strategy will be put in place.

Vodafone Idea is now clearly the market leader in India, but it will only take a couple more months of Reliance Jio continuing on its current path for this lead to be eroded. The momentum is gathering behind Reliance Jio and new products and services (such as fixed broadband) will only add more as convergence ambitions are realised; the emphasis is certainly on Vodafone Idea to prove this isn’t turning into a one-man market.

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.

Jio closes the gap as Indian market continues growth

The Telecom Regulatory Authority of India has released its monthly update on telco subscribers across the country, and Jio is continuing to erode the gap with its rivals.

On the whole, the Indian telco market is continuing to grow. Wireless subscriptions increased by 1.37%, adding just over 15 million new subscriptions to the armoury taking the total up to 1.14 billion across the country.

What is slightly encouraging is the fairly balanced uptake; there might be a social divide between the rural and urban communities, but this difference does not seem to be compounded by digital as the revolution sweeps throughout the nation. In the urban regions, wireless subs increased 1.27% to 633 million, while it was 1.49% to 512 million in the rural areas.

Looking at the individual winners, Jio has been hoovering up subscriptions, though Idea Cellular has also made an impact this quarter. Perhaps this is a sign the Jio effect is starting to fade, as it would appear growth has been amassed from new subscriptions as opposed to eroding the customer base of competitors.

Telco Net adds Market Share
Jio 9,713,047 18.78%
Idea Cellular 6,369,785 19.24%
Vodafone 275,219 19.43%
Bharti 10.689 30.05%
BSNL 244,285 9.87%

Momentum is still with Jio galloping up the market share rankings, though with the competitors stabilising their own numbers it might appear the major disruption is over. That is, until Jio decides to launch another ridiculous offer, or in a few years’ time when 5G appears in the country. Looking at the ridiculous Jio idea, you can’t help but assume it might come in the form of a convergence play.

Wireless subscriptions are shooting upwards, though broadband is certainly not on the same trajectory. As it stands there are only 22 million broadband subscriptions in the country out of almost 250 million households. Over the course of June, broadband subscriptions actually declined 0.5%. Jio has already told us the next wave of disruption will come in the broadband space, and when combined with its media and entertainment assets, there is a huge opportunity to run a convergence play.

Stealing subscriptions by undercutting can only go on for so long, but now Indian consumers have become addicted to the taste of the internet through mobile, the broadband opportunity becomes a lot more appealing. Jio has a huge mobile customer base, which it can continue to grow, though leveraging this asset by launching additional services could be a very profitable idea.

India launches telecom policy consultation aiming for $100bn investment

The Telecom Regulatory Authority of India (TRAI) has kick-started a consultation process to develop its National Telecom Policy for 2018, intended to launch India up the global digital rankings.

The consultation itself is a process the regulator goes through every couple of years to redefine its mission and objectives. Previous consultations have taken place in 1994, 1999, 2004 and 2012, with each redrawing the technology roadmap, setting out new ambitions and milestones. The process seemingly works as India has become one of the fastest growing technology markets worldwide.

Looking though the consultation paper, you can see why; it’s logical, comprehensive, written in simple language and steadily achievable. Perhaps there are a few of the established markets who could learn a thing or two here about setting realistic aims, as well as a rational way to achieve them.

India fact“Recognizing that provision of world class telecommunications infrastructure is the key to rapid socio-economic growth of the country, the Government has been announcing its telecom policy statements on a regular interval since the onset of market liberalization in the country in the early 1990s,” the paper states.

“(The) DoT (Department of Telecoms), on its web-site, has stated that the new telecom policy will be governed by the key guiding principle of alignment with the national vision. Its major themes will, inter-alia, be regulatory & licensing frameworks impacting the telecom sector, connectivity-for-all, quality of services, ease of doing business, and absorption of new technologies including 5G and IoT.”

The mission here is to make India a country which can compete in the global digital market. While the government has praised itself on the work to date, it recognises India is outside the tent looking in on the connected commanders. Connectivity is an enabler of socio-economic development, and while India is still a young nation in terms of telco development, the strides it has made in the last couple of years is staggering.

In terms of the objectives, there are quite a few, and while they are ambitious, none are completely out of reach. The deadline will be 2022, when the country will be celebrating its 75th year of independence, by which time the following areas will hopefully be a reality:

  • Increase rural tele-density to 100 %
  • To provide data connectivity of at least one Gbps speed to all Gram Panchayats (local self-governance system in India)
  • Wireline broadband services to 50% households in the country
  • High-quality wireless broadband services at affordable prices to 90% population
  • 900 million broadband connections at a minimum download speed of 2 Mbps, 150 million broadband connections at a minimum download speed of 20 Mbps
  • Develop 10 million public Wi-Fi hotspots in the country;
  • Average speed of 20 Mbps for wireless, and 50 Mbps for wireline internet connectivity
  • Launch India into the top-50 nations in international rankings for network readiness, communications systems, and services
  • Enable access for connecting 10 billion IoT/ M2M sensors/devices
  • Attract an investment equivalent to £100 billion in communication sector
  • Become net positive in international trade of communication systems and services

For every single objective which is set forward in the plan, the team has also laid out several ways in which it can be achieved (see below). This level of transparency and logic is practically unheard of in European nations, where sky-high ambitions are set, while the plan to get there remains shaky and full of holes.

Of course, there are still details which need to be filled in, but this is the reason for the consultation paper. B taking this comprehensive and transparent approach to advancing digital ambitions of a country, you can see why India is growing so rapidly as a digital society.


India goes opposite direction to US on Net Neutrality

Net neutrality is a contentious issue right now, and Indian regulator TRAI might add further fuel to the fire taking pretty much the polar opposite position to US regulator FCC.

Just as the FCC is unveiling plans to dismantle the previous administrations net neutrality rules, the Telecom Regulatory Authority of India (TRAI) has released a paper where it has stated the importance of protecting net neutrality.

“The service providers should be restricted from entering into any arrangement, agreement or contract, by whatever named called, with any person, natural or legal, that has the effect of discriminatory treatment based on content, sender or receiver, protocols or user equipment,” the statement from TRAI reads.

In short, treat all content as equal. The term ‘discriminatory treatment’ would include any ‘restriction or interference’ in terms of the delivery of content. This means service providers will not be able to block, degrade, slow or offer preferential speeds/treatment to any content offered by third parties. It basically puts a strong line through any idea of a two-speed internet in India.

One area which is exempt from the net neutrality position is what TRAI has defined as ‘specialised services’. This is a very specific type of service which is not available to the general public. This about services to mission critical services for example (i.e. ambulance services) or critical infrastructure. In short, if you can sell it to Joe Bloggs on the street, you can’t speed it up or slow it down.

TRAI has also stated the telcos will have to be more transparent on how they optimise data traffic across the network, as well as disclosing any impact this will have on the user. This disclose should also include any information on agreements it has entered into to offer ‘specialised services’ (which can be prioritised) that might impact performance for the general public.

The fact that India’s position seems to differ so greatly from the US should hardly be surprising. The partisan nature of US politics has seen the seesaw dip and rise so violently over a number of key issues not just limited to net neutrality. The Republicans sit so far on the right, and the Democrats so far on the left, the idea seems to be to uphold their own political ideology and screw over the opposition, irrelevant of the consumers best interest, which will most likely sit somewhere in the middle.

In terms of impact on the wider Indian telco market, the news will probably not be welcomed by the likes of Bharti Airtel, Vodafone or Idea. After getting beaten senseless in the tariff markets by Jio, the traditional telcos might have been looking for other ways to recoup profits lost in the race to the bottom. With this statement, TRAI has closed off one avenue, so it wouldn’t be too surprising if this notion from the regulator is challenged in the courts.

Tata comes from nowhere to top Indian subscriber adds

The Telecom Regulatory Authority of India (TRAI) has released subscriber numbers for August, and somehow Tata Teleservices topped the net add list.

It still doesn’t quite have the numbers to compete at the top of the overall rankings, but if the subscriber numbers from August are anything to go by, Airtel has bagged itself a nice acquisition. In terms of the overall performance of the notable names in the market:

  • Tata Teleservices added 4.89 million subscriptions over the month
  • Reliance Jio has almost 4.1 million net additions
  • Airtel lost 765,000
  • Vodafone was down 2.4 million
  • 6 million subscriptions vanished from Idea’s ranks
  • Reliance Communications managed to misplace 4.6 million customers

Last month, Bharti Airtel agreed to acquire the ‘struggling’ mobile business of Tata Teleservices, in what is looking like some great business now. As part of the deal, all past liabilities and dues are to be settled by Tata, while Airtel would absorb the 40 million customers of Tata. According to TRAI, this number has now swelled by 11% without Airtel having to do a thing, taking market share to 3.96%.

Unsurprisingly, Airtel still stands at the top of the market share rankings with 23.7%, while Vodafone and Idea take two and three with 17.55% and 16.11%. The combination of these two would certainly make a monster business, but dropping a combined 5 million customers is a worry. We’re not too sure how many customers were exchanged between to two, but 5 million is still a very large number. Reliance Jio’s market share now stands at 11.19%.

Elsewhere in the Indian market, American Tower has been named as the acquirer of the standalone tower businesses of Vodafone India and Idea Cellular.

The pair have separately agreed to sell their respective standalone tower businesses in India to ATC Telecom Infrastructure Private Limited for an aggregate enterprise value of $1.2 billion. The combined portfolio has approximately 20,000 towers with a combined tenancy ratio of 1.65x. As part of the agreement, the trio have agreed to treat each other as long-term preferred partners.