Subscribers base likely to rise as Mobile number portability churn settles  

Telco subscriber growth is likely to revive as the subscription report from the Telecom Regulatory Authority of India (TRAI) indicates the initial tariff hike impact is over. As per the October 2024 data, the Mobile Number Portability (MNP) churn has reduced with lesser subscriber requests than July 2024, when the tariff hikes were implemented.

MNP numbers last year steadily grew from 11.84 million subscriber requests in June to 14.66 million subscriber requests in August. The upwards trend coincided with telco announcements of revised data plans for customers. However, the numbers dipped to 13.32 million requests in September and increased marginally to 13.45 million requests in October, still lesser than the 13.68 million requests reported in July.

The data vindicates telcos’ earlier confidence in the resurgence of customer base. For example, Akshaya Moondra, CEO of Vodafone Idea (Vi), had told shareholders in the November earnings call, “The impact of BSNL [is] reversing quite quickly from August to September, from September to October and from October to November. And in some ways we are inching towards the position which was there before the tariff increase… we believe it will happen based on customer experience because there is definitely a differential in experience for a customer who is a high user of either data or voice.”

Aside from Vi, other telcos had also told businessline that customers who ported out to BSNL returned to them for superior quality of service.

Tariff benefits likely to persist till FY25 end

According to Axis Capital analysis report revenue benefits of tariff hikes will continue in the third quarter of fiscal year 2024-25, though at a lower level than in the previous quarter.

It said, “Bharti Airtel saw positive subs adds after three months. Reliance Jio continued to see an overall subscriber decline, but it was accompanied by a rise in Visitor Local Register proportion (indicating active subscribers), which implies churn/removal of inactive subscribers. It rose from 92.5 percent in June to 97.5 per cent in October. Vi though continues to struggle with sustained decline in subs base and lower VLR (85 per cent in October). This indicates there is further scope for subscriber decline for Vi in the coming quarters.”

Meanwhile, IIFL Securities said that BSNL’s sub adds slowed down around the same time. “The third quarter should see residual benefits from the tariff hike.

The extent and timing of flow-through of the July tariff hikes vary across telcos due to differences in subscriber mix (2G vs. 4G), subscriber quality and proportion of customers on longer-duration packs,” it said in its report. By the end of the fourth quarter of fiscal year 2024-25, IIFL estimates Airtel’s mobile revenue to rise around 16 per cent, Jio’s to grow by around 15 per cent and Vi’s to grow by around 5.5 per cent.