As the pace of subscriber churn increased for Vodafone Idea in April and May, the spillover of it is reflected in the market share that the company has been losing for 26 consecutive months now, according to data by the Telecom Regulatory Authority of India (Trai).
In the month of May, Vodafone Idea lost its market share in all 22 circles to peers Reliance Jio and Bharti Airtel. Till some time back, the company was able to maintain its market share in a few circles of Himachal Pradesh, UP (West), UP (East), North East and Madhya Pradesh.
However, even those have started seeing weakness now. Two years ago in April 2021, Vodafone Idea had a market share of nearly 24%, which reduced to 20% at the end of May.
The reason for it can be attributed to weak capital expenditure, especially on the network, delay in the launch of 5G services, shift of lower-end subscribers to other operators, lucrative offerings by the competition in some segments, according to analysts.
In the past 26 months as of May-end, Vodafone Idea has lost nearly 53 million mobile subscribers, taking its subscriber base to 230.94 million.
“Vodafone Idea lost market share in all 22 circles with big losses in Mumbai, West Bengal, Maharashtra, UP (East), Punjab and Kolkata,” brokerage house Kotak Institutional Equities said, adding that the market share gains for Bharti Airtel and Reliance Jio came at Vodafone Idea’s expense, especially among premium subscribers driven by their pan-India 5G rollouts and Vodafone Idea’s cash constraints and long-delayed fundraise.
Currently, Vodafone Idea has over 30% market share in four circles–Kerala, Delhi, Gujarat, and Mumbai. The operator leads only in Kerala circle among with a 33.8% market share.
Brokerage house Morgan Stanley said, “Net subscriber additions for Reliance Jio in May were broad-based across rural and urban as well as across circles while they were largely concentrated in circle A/B for Bharti Airtel and market-share loss acceleration for Vodafone Idea was seen in Metros during the month.”
Reliance Jio which had a market share of 36% two years ago, has seen an increase in its share to 38.2% at the end of May. Similarly, Bharti Airtel’s market share rose to 32.6% from 29.8% two years back.
In May, Bharti Airtel gained the market share in 18 of 22 circles with large gains in Maharashtra, Tamil Nadu, West Bengal and Rajasthan. On the other hand, Reliance Jio gained market share in all 22 circles, with big gains in Karnataka, Maharashtra, Uttar Pradesh (West), Tamil Nadu, Kolkata, Haryana and Punjab, according to Kotak Institutional Equities.
On seeing the continuous loss of subscribers by Vodafone Idea and state-owned BSNL, analysts expect that the telecom sector could soon see a duopoly. In the past 17 months as of May end, BSNL has lost 13 million subscribers, taking its subscriber base to 101.4 million.
“Vodafone Idea’s subscriber losses may accelerate due to Jio’s recent Jio Bharat launch, which will turn the market into an effective duopoly sooner than expected,” said brokerage house Jeferries.
While Vodafone Idea said it will continue to make investments for expanding 4G coverage and capacity, the company’s 4G subscriber additions have also been weak. In May, the company added only 10,000 4G subscribers, taking its 4G base to 123.6 million. In April, Vodafone Idea lost 1.3 million subscribers.
The company will launch 5G services once it raises the much awaited funding.