SIM consolidation in telecom keeps gross subscriber trends muted in January

The tariff hike announced in November 2021 has prompted users to reconsider their choice for telecom service providers, which has led to SIM consolidation, and has resulted in a drop in the number of mobile SIM cards in the market.

The decline was largely driven by Reliance Jio, which saw its gross subscriber base drop by 9.3 million to 406 million in January. It is to be noted that January is the second consecutive month of decline in gross subscribers for this telecom service provider. Analysts say the decline indicates a clean-up of inactive users of Jio.

close competitor Bharti Airtel Limited, Its gross subscriber count increased from 0.7 million to 356 million in January.

It was strong for both these companies as far as the number of active customers is concerned. In January, Jio saw a growth of 4.2 million, while Airtel reported a growth of 1.3 million. For the industry, the Visit Location Register (VLR) or the number of active customers grew by 6 million in January. VLR is a metric that shows the number of active subscribers on a mobile network.

Vodafone Idea Ltd lags behind with gross, active and 4G subscriber base seeing a decline in January. Despite recent fund-raising, Vodafone Idea is struggling. Analysts say the company will need to infuse more capital into network expansion to compete with the other two firms, failing which its prospects will remain slim, at least in the near term.

Meanwhile, according to analysts at Nomura Financial Advisory & Securities (India) Pvt Ltd. Ltd., the impact of SIM consolidation among bottom-line customers, following sharp tariff hike, is likely to keep the industry’s net additions low in the near term. However, with the 5G launch in FY23, the market share for Airtel and Jio is expected to pick up, Nomura said in a report on March 30.