How has the Indian Telecom Sector Fared thus far in FY22?

In the recently announced Telecom Subscription Data for July 2021 by TRAI, Reliance Jio has once again emerged as the winner, gaining 6.5 million users over the month. At the same time, Bharti Airtel managed to gain around 2 million new subscribers, while Vodafone Idea lost 1.4 million users. However, it has been a tumultuous few months for the Indian telecom sector.

Jio, Vi Keep Setting Records

For Reliance Jio, this fiscal has been perfect thus far, with significant gains in every month. Since the start of FY22, the largest telco has gained more than 20 million new users. That has seen it extend its lead, starting the fiscal at 36.15% market share, and in July, it held 37.34% market share.

However, Vodafone Idea has seen a lot of churn. The telco has lost over 12 million users since April. More worryingly, the telco has seen red over every single one of the months till July. The telco, while struggling financially, have also seen its market share shrink from 23.83% to 22.91%; a dip of almost 1%. For Vodafone Idea, the records that it has been setting are not really wanted.

Surprisingly, it was not alone; Bharti Airtel suffered a lot of churn as well. In May, it suffered the steepest loss in a while, when it lost over 4.6 million subscribers. For the second largest telco, things have been ambiguous. Its net subscriber gain stood at 1.6 million users - a far, far cry from its rival at the top.

Uncertain Times in the Indian Telecom Sector

Right now, the Indian telecom sector is brimming with activity. The telecom relief package has really lifted up the mood in the telecom corridors. What's more, 5G has also set the sector buzzing. However, the fact that there are significant debts does put a damper on the party.

The TRAI data over the past few months reflects the same uncertainty. At the beginning of the fiscal, India had 1.183 billion mobile subscribers. In May, the industry saw a sharp fall, to 1.176 billion. Though telcos can discount the month as well - the second wave of the COVID-19 pandemic was at its peak in the month in India. By the end of July, however, the telecom sector had more than recovered; the telecom industry now boasts 1.186 billion mobile users.

Incidentally, the peak VLR has been going down steadily. In April, the peak VLR stood at 997 million; in July, it stood at 989 million. This means that there are lesser users active per month; this can mean two things. Either, the active users are reducing, or the proliferation of broadband has been increasing.

Broadband Gaining Momentum

During the 4 months for which TRAI has released data, the broadband sector has seen a steady rise. From 780 million in April, to 808 million in July.

Within the broadband scene, Reliance Jio has the most dominance; it has the majority share in the broadband market at 55.24%. Bharti and Vodafone Idea together make up a sliver over 40% of the market. BSNL, Atria Convergence and other providers make up the pie-chart.

The two historic trends - the active users declining and broadband users rising - points to the fact that people are relying more and more on broadband for their internet needs. Also, it can be the case that people are using multiple SIMs lesser than the past. It could also indicate a peak for the telecom industry for the time being.