Broadband penetration continues to rise; industry moving towards higher ARPU regime, says report

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In June 2020, the number of broadband subscribers grew by 14 million, the highest increase seen since November 2019

The number of broadband subscribers has gone up to 59 percent of the overall wireless subscriber base in June 2020 from 58 percent in May 2020 and 47 percent in March 2019, said a report.

Moreover, in June 2020, the number of broadband subscribers grew by 14 million, the highest increase seen since November 2019, said a report by India Ratings (Ind-Ra).

“This increase in broadband penetration along with rise in data tariffs reflects that the Indian telecom industry is moving towards a higher ARPU (average revenue per user) regime. Data tariffs rose to Rs 11.2/GB in 4QFY20 from Rs 8.5/GB in 3QFY20, as reported by Telecom Regulatory Authority of India (TRAI),” said the rating agency.

The tariff differentials for the pre-paid and post-paid tariff plans among the telcos is already narrowing down over the past one year and the recently announced post-paid tariff plans by Reliance Jio Infocomm also indicate the inclination of the largest player in the industry towards a higher ARPU regime in the long run.

The industry-wide subscriber base continued to decline month-on-month in June 2020.  That being said, the extent at which the subscribers base declined moderated in June 2020, wherein subscribers declined by 3.2 million, as compared to the decline of 5.6 million subscribers in May 2020.

While some portion of this decline in subscriber base can be attributable to the nationwide lockdown post March 2020 owing to COVID-19, a significant portion of decline was already expected in the pre-COVID era.

Telcos might be voluntarily letting go of low ARPU customers in an effort to move to higher ARPU, and SIM consolidation was already happening in the industry.

“Moreover, Ind-Ra believes that the visitor location register (VLR) subscriber base data, which represents the active subscribers in the overall wireless subscriber base and the growth in the industry revenue, are the more appropriate indicators, which need to be monitored over the next six to nine months,” Ind-Ra said.

The industry-wide revenue (excluding Bharat Sanchar Nigam Limited) remained almost stable in 1QFY21.

Bharti Airtel maintained its strong market position in the industry in terms of its active customer base and high ARPU data customers in June 2020.

Airtel’s VLR subscriber base increased by 3.7 million subscribers in June 2020, as compared to a decline of 2.1 million and 3.7 million VLR subscribers of RJio and Vodafone Idea, respectively.

BAL also reported the highest growth in the broadband subscriber base by 5.3 million subscribers in June 2020 while RJio and Vodafone-Idea reported an increase of 4.6 million and 3.4 million subscribers, respectively, in June 2020.

Image credit: Voicendata

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