The Telecom Sector's 2021 in Numbers

TRAI has, at last, released the data for December 2021, and closed the book on 2021, albeit on a low. However, 2021 remained one of the more successful years for the telecom sector. Looking back, while the telecom sector as a whole did shrink, the change was slight. So, one can say that the telecom sector pretty much remained where it started, purely in terms of subscriber figures.

Here's a look at the telecom sector, in numbers.

Total Users - Just a Little Decline for the Telecom Sector?

As it is pretty evident, the total wireless subscribers had already broken the 1 billion mark. However, while the telecom sector came mighty close on two occasions, it could not break the 1.2 billion mark during the year, with the peak coming in July. However, the total change from January 2021 to December 2021 was at -8.7 million, or a decline of 0.76% throughout the year. That is why the graph is basically a plateau.

While this dip might not concern anyone in the short run, we can see that there are some factors at play. During the first two quarters of 2021, the second wave of the COVID-19 pandemic struck, causing major disruptions for every sector in the country. The same was true for the telecom sector as well; while the sector powered through the initial hurdle, it recorded a significant decline in May, indicative of the effects of the pandemic and the SIM consolidation that followed.

The 4G tariff hikes, conducted by all three private telcos, have also contributed to a gradual decline in user figures. Since announcing the hikes in November, the sector has lost almost 13 million total subscribers. Again, most of this decline can be blamed on SIM consolidation; since most of the broadband usage in the country comes from mobile broadband, many subscribers have multiple SIMs. The recent tariff hikes have made it quite difficult for such users to keep up with two recharges, when telcos have raised tariffs by as much as 20%.

The Losses and the Gains

At a closer look at the trends, the telecom sector saw, in terms of total subscribers gained and lost three very obvious crashes. The first one happened in May, and as mentioned previously, is attributable to COVID-19 and its immediate aftereffects. The last dip, however, concerns me.

This last dip, which still can be mostly attributed to SIM Consolidation, comes in the immediate aftermath of the 4G tariff hikes. This implies that Indian customers do not want to pay more than a certain amount per month. From an industry viewpoint, these tariff hikes were necessary for survival for the likes of Vi. However, the customers seem to think that the price point was sustainable before.

I think that this dip is temporary, and as the telecom sector stabilizes, the users will again cross the 1.2-billion-mark. With the upcoming 5G spectrum auction and subsequent rollout, telcos don't have time to catch their breath and think about subscriber figures; all of them are banking hard on 5G, and if the rollout fell on its face, it will mean disaster for everyone involved.

In short, it is not going to be easy. India's telecom sector is already a graveyard of many telcos; these figures only seem to increase the pressure on the existing telcos. Everyone in the telecom sector has to consolidate their efforts and find a balance between customer satisfaction and financial viability; they can't just rely on the customers getting used to elevated prices.

Speaking in terms of telco-wise performance, Airtel seems to have remained the most stable throughout the year. Jio, though, had quite a ride, seeing two almighty crashes in September and December. Vi had a really positive start to the year, gaining users consistently for the first three months. Then, it just lost users, at a consistent, nonstop pace.

The Tussle in the Market

In general, almost everyone has retained their market share, with only minor changes throughout the year. Reliance Jio, of course, took the lead right from the beginning, and the rest only played catch up. Though Jio needs to watch its back; Airtel has cracked in the 30s, and judging by the two stellar financial performances it has had in Q2 and Q3, it will challenge for the top spot in 2022. Vodafone Idea's market share shrank from 24.58% in January 2021 to 23% flat in December 2021.

BSNL, too, saw its market share dwindle ever so slowly. Of course, with BSNL 4G, there is still hope for the state-run telco, but it has to roll that out this year. The private telcos have already moved on to 5G, leaving BSNL half a decade behind. Still, BSNL has one ace up its sleeve; it can, and will, offer the cheapest 4G plans by far, and that will surely dig in the private telcos' market share. We should probably count MTNL and RComm out, given their combined user share comes out at 0.28% of the total users in the country, and most of those users are from MTNL.

Given the overall fall, all the gains and losses the telecom sector saw have been evened out. That makes 2021 a rather lukewarm year.

What's For 2022?

Of course, the year started with the Union Budget announcements that we will finally have a spectrum auction in 2022, and a rollout this fiscal. However, the government needs to fix a date for the auction, fast. Along with this, the telcos also need to ramp up their efforts to move more users to 4G from 2G and offer better entry-level deals for the users to do so.

About a fifth of India's telecom users is still on 2G, which has been a roadblock towards the government's ambitions of a Digital India. Before that, even, the government has aimed to finish up the BharatNet project by 2025. That means that the government will have connected all the villages in the country by then. The amount of telecom infrastructure makes the BharatNet project a real game-changer for the telecom sector in India.

Therefore, the ball falls in the telcos' court yet again. 2022 will define the landscape of India's telecom sector for the next decade. Will the telcos pull through, or will India claim another telco's head?