The key highlights of the report include monthly subscriber additions in the telecom industry which showed a declining trend over 1QFY18, after posting high growth during October 2016 to February 2017 on account of Reliance Jio Infocomm Ltd's (RJio - 'IND AAA'/Stable) free offerings. RJio gained 9.9% market share between September 2016 and May 2017. Bharti Airtel Limited leads rural subscriber market share, while RJio's subscriber base is more urban-centric. Weaker players are losing market share with the competitive play shifting to data from voice. Rural markets are hitherto providing positive net additions to the subscriber base, as against urban markets which have saturated. The overall tele-density in India increased to 93.6% in May 2017 from 83.1% in May 2016.
The proportion of active wireless subscribers was around 86.3% of the total wireless subscriber base in May 2017 (May 2016: 90.6%). The lower industry VLR (visitor location register- measures active subscribers) ratio reflects the multiple sim phenomenon and an increase in dormant subscribers.
Going forward, competitive intensity could increase in rural markets with the launch of low cost Voice over Long-Term Evolution (VoLTE) phones targeted at 2G/first time data users. Jiophone is likely to also accelerate migration from 2G to 4G which will step up the demand for telecom tower sites especially in the unpenetrated areas are housing the larger piece of the target market. The industry data usage has grown rapidly (1000MB per user in the quarter ending March 2017 from 884MB in the quarter ending December 2016) as data tariffs declined. Ind-Ra expects data realisations and average revenue per user levels to continue to remain subdued in view of unlimited voice and data bundled plans.
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