The Telecom industry in India is the second largest in the world with a subscriber base of 1,179.21 million as of August 2023 (wireless + wireline subscribers). India has an overall tele-density of 84.69%, of which, the tele-density of the rural market, which is largely untapped, stands at 57.97 % while the tele-density of the urban market is 133.55 %. 

The industry’s exponential growth over the last few years is primarily driven by affordable tariffs, wider availability, roll-out of Mobile Number Portability (MNP), expanding 3G and 4G coverage, evolving consumption patterns of subscribers, Government’s initiatives towards bolstering India’s domestic telecom manufacturing capacity, and a conducive regulatory environment.To further expedite digital connectivity, the Government has approved the auction of IMT/5G spectrum for deployment of 5G services within the country.  

With Vodafone Idea in dire straits and BSNL lagging behind peers, the Telecom industry scenario effectively constitutes a duopoly, with Reliance Jio (Jio) and Bharti Airtel (Airtel) holding a combined revenue market share of 78 per cent. The third private operator, Vodafone Idea (Vi), lags with 16 per cent, and Bharat Sanchar Nigam (BSNL) holds the rest. 

Jio and Airtel are likely to pull further ahead. Both have already rolled out 5G networks and claim a combined 125 million 5G users. Vi is yet to roll out 5G, and BSNL has just started the 4G roll-out. Any subscriber upgrading from 2G is likely to migrate to one of the top two networks.The launch of Jio Bharat, an internet-enabled phone from Reliance Jio is likely to capture further market share and the number of subscribers. 5G rollouts are already driving market share gains for Jio and Airtel. 

Both Jio and Airtel are seeking new revenue streams by leveraging 5G networks and fixed wireless access. Both are promoting enterprise-level services. It’s challenging to assess in concrete terms, but it’s an upside that could accelerate revenue growth as 5G gains traction at the enterprise level. 

The duopoly has enabled the duo to hike tariffs, resulting in better average revenue per user (ARPU). Vi has also anticipate a decline in capital expenditure (capex) as they complete the 5G ramp-up. 

Telecom Subscribers forAugust 2023:TRAI 

Jio and Airtel continued to gain subscribers 

The number of telephone subscribers, as reported by the Telecom Regulatory Authority of India (TRAI), increased 0.2% to 1,179.21 million in August2023 over the previous month, with 2.36 million subscribers’ addition. Urban telephone subscription increased by 1 million, or 0.15%, to 657.47 million whereas the rural subscription gained by 1.36 million, or 0.26%, to 521.74 million.  

The overall Tele-density in India increased 11 bps to 84.69% inAugust 2023. The Urban Tele-density remained unchanged at 133.55% inAugust 2023 however Rural Tele-density increased 14 bps at 57.97% during the same period. The share of urban and rural subscribers in total number of telephone subscribers at the end ofAugust2023 was 55.76% and 44.24% respectively. 

Wireless Subscribers- Total wireless subscribers saw a growth of 0.19% to 1,148.43million in August2023 over the previous month, with2.19 million subscribers’ additions. Wireless subscription in urban areas increased by 0.13% or 0.84 million to 629.39 million at the end of August 2023 however, wireless subscription in rural areas increased 0.26% or 1.35 million to 519.04at the end of August 2023. 

The rise in total subscribers was largely contributed by Reliance Jio, India’s largest telecom operator by market share, with 3.24million new wireless subscribers addition on a net basis, and Bharti Airtel with1.21 million new users addition. BSNL lost 2.22 million subscribers and Vodafone Idea lost 49,782 subscribers during the month.  

As of August 2023, Reliance Jio was at the top position with wireless subscribers’ market share of 38.81%. The company’s total wireless subscribers rose to 445.73 million. In comparison, Bharti Airtel’s was in the second spot with market share stood at32.78% and Vodafone Idea’s was in the third position with 19.88% in the wireless subscribers segment. The wireless subscribers’ base of Bharti Airtel and Vodafone Idea was at 376.46 million and 228.28 million, respectively at the end of August 2023. State-owned BSNL finished a distant fourth with market share stood at8.36% to95.83 million. 

The Wireless Tele-density in India increased from 82.38% at the end of July 2023 to 82.48% at the end of August 2023. The Urban Wireless Tele-density decreased from 127.87% at the end of July 2023 to 127.84% at the end of August 2023 however Rural Tele-density increased from 57.53%to 57.67% during the same period. The share of urban and rural wireless subscribers in total number of wireless subscribers was 54.8% and 45.2% respectively at the end of August 2023. 

As on 31st August, 2023, the private access service providers held 91.47%market share of the wireless subscribers whereas BSNL and MTNL, the twoPSU access service providers, had a market share of only 8.53%. 

Wireline Subscribers- TotalWireline subscribers increased 0.56% to 30.78 million in August2023 over the previous month, with 0.17 million subscribers’ addition. The share of urban and rural subscribers in total wireline subscribers were 91.24% and 8.76% respectively at the end of August2023. 

The Overall Wireline Tele-density in India increased 01 bps to 2.21% at the end ofAugust2023. Urban and Rural Wireline Tele-density were 5.7% and 0.3% respectively during the same period. BSNL and MTNL, the two PSU access service providers, held 30.02% of the wireline market share as on 31st August2023. 

Broadband- The number of broadband subscribers increased 0.96% to 876.53 million in August2023 over the previous month, with 8.33 million subscribers’ addition. Top five service providers constituted 98.35% market share of the total broadband subscribers at the end ofAugust2023. These service providers wereReliance JioInfocomm Ltd 455.33 million, Bharti Airtel 253.86 million,Vodafone Idea 125.55 million, BSNL 25.12 million and Atria Convergence 2.19 million. 

As on 31st August, 2023, the top five Wired Broadband Service providerswere Reliance JioInfocomm Ltd 9.59 million, Bharti Airtel 6.87 million,BSNL 3.71 million, Atria Convergence Technologies 2.19 million andHathway Cable & Datacom 1.12 million.As on 31st August, 2023, the top five Wireless Broadband Service providerswere Reliance Jio Infocom Ltd 445.73 million, Bharti Airtel 246.99 million,

Vodafone Idea 125.54 million, BSNL 21.41 million and Intech Online Pvt.Ltd. 0.24 million. 

Active Wireless Subscribers (VLR Data)-Out of the total 1,148.43 million wireless subscribers, 1043.38 million wireless subscribers were active on the date of peak VLR inthe month of August 2023. The proportion of active wireless subscribers was approximately 90.85% of the total wireless subscriber base. 

Bharti Airtel has the maximum proportion 99.75% of its active wireless subscribers (VLR) as against its total wireless subscribers (HLR) on the date of peak VLR in the month of August 2023 and MTNL has the minimum proportion of VLR 35.83% of its HLR during the same period. 

Outlook 

India has an overall tele-density of 84.69%, of which, the tele-density of the rural market, which is largely untapped, stands at 57.97 % while the tele-density of the urban market is 133.55 %.With Vodafone Idea in dire straits and BSNL lagging behind peers, the Telecom industry scenario effectively constitutes a duopoly, with Reliance Jio (Jio) and Bharti Airtel (Airtel) holding a combined revenue market share of 78 per cent. The third private operator, Vodafone Idea (Vi), lags with 16 per cent, and Bharat Sanchar Nigam (BSNL) holds the rest.The launch of Jio Bharat, an internet-enabled phone from Reliance Jio is likely to capture further market share and the number of subscribers. 5G rollouts are already driving market share gains for Jio and Airtel.