With Vodafone Idea’s active subscriber loss moderating and net addition of data subscribers in December 2024, the struggling telco is likely to retain subscriber market share more effectively, according to analysts.
The telco, which is gearing up for commercial 5G launch this quarter, added 1.6 million data customers in December against a decline of 0.7 million users in the previous month, according to monthly subscription data released by the Telecom Regulatory Authority of India (Trai) earlier this week.
In the same month, rivals Bharti Airtel and Reliance Jio saw flat movement in data subscriber base, which analysts said suggests normalisation of respective user base.
During its December quarter earnings call, Vodafone Idea chief executive Akshaya Moondra had noted that the telco is seeing momentum in data subscriber addition as its expands and upgrades it 4G network, and prepares to launch its 5G services.
Over the past few months, the telco has been activating 5G sites in a phased manner across key circles like Mumbai in the lead up to commercial 5G launch this month starting with Mumbai, Bengaluru and Delhi, followed by other priority circles.
Challenges for the cash-strapped telco, however, remain as it continued to see decline in active user base in keeping with the trend seen over the past several months. The telco lost 0.4 million active users in December as compared to 1.9 million the month before indicating moderation in active subscriber loss.
“Moderation in VIL’s active subscriber loss and improvement in data subscriber addition in December may lead to a slower pace of market share accretion for Bharti and Jio in the future,” analysts from brokerage firm Jefferies said in a report.
Jio’s market share rose to 40.42% in December (November: 40.15%) while Airtel was at 33.49% (November: 33.45%). Vodafone Idea’s subscriber market share further shrunk month-on-month to 18.01% (November: 18.19%).
While Jio and Vodafone Idea lost active subcribers, Airtel saw net addition (+1.7 million vs. – 3 million in November), analysts from Morgan Stanley said in their report. Airtel’s active subscriber gains were driven by net additions in circle A (2 million).
As a result, Airtel’s share of active subscriber was up 36% (+17 basis points) while Jio and Vodafone Idea lost share at 42% (-14 basis points) and 16.6% (-3 basis points) respectively.
Overall, the telecom sector saw slowdown in active subscriber loss, suggesting moderation in volatility and SIM consolidation in the sector post the tariff hikes undertaken in last July analysts noted.
According to data released by the sector regulator, active subscribers base, accounted for 92.15% of the total wireless subscribers and subscriber base fell 0.29 million in December to 1.06 billion.
Experts also said that while the majority of the impact on telco subscriber base due to July 2024 tariff hikes has been absorbed, some volatility still remains.
“The sector’s active subscribers moderated in December suggesting cool-off in volatility and sim consolidation in the sector post the tariff hikes undertaken in July 2024. (But) data subscriber base was flat month on month in December 2024, post a sharp jump in November 2024, suggesting some sim-consolidation,” Jefferies analysts said.
Overall, the mobile subscribers base rose by 2.01 million to 1.15 billion in December, according to data released by Trai. Growth was led the urban markets which saw 2.75 million subscriber addition while rural subscriber base shrunk by 740, 000.
