Consolidation has been the story of the telecom sector in India over the past decade
Consolidation has been the story of the telecom sector in India over the past decade. At the end of 2012 there were 15 different service providers which dropped to 8 service providers at the end of 2021. Although there may be 8 service providers providing wireless services by the end of 2021, the top 4 hold a market share of more than 99%. In contrast, the top 4 in 2012 held just over 65% market share.
India ranks second after China in terms of number of phone users (both landline and telephone) in the world. India’s rendezvous with telecommunications began in British India with the introduction of the telegraph, witnessing a slow but gradual growth in post-independence India.
The establishment of C-DOT in 1984 was a historic moment with an encouragement for the indigenous development of telecommunications in India. The liberalization, privatization and globalization brought about in the 1990s ushered in a great change for the telecommunications sector and increased demand for telephone connections across the country.
The Telephone Regulatory Authority of India (TRAI) was established in 1997 as the regulatory authority for the telecommunications sector, followed by the establishment of Bharat Sanchar Nigam Limited (BSNL) in 2000. With the increase in demand for services telecommunications industry and subsequent development & accessibility to better technology, the Indian government has opened up the telecommunications sector to private players to offer various services.
Over the years, despite a significant increase in the number of phone users, especially mobile users in the country, the number of subscribers to the state-owned BSNL has declined. The data provided by the government in answer to a recent question in Lok Sabha indicates the magnitude of this drop in BSNL subscribers.
In this story, we look at subscriber trends for BSNL and other operators in the country. The data taken into account for the story is based on the information available with TRAI.
Slower growth in the number of wireless subscribers over the past three years
According to TRAI, at the end of December 2021, there were a total of 115.46 crore wireless phone subscribers in India. This is slightly more than the 115.38 crores at the end of 2020. This is a continuation of the slow growth seen in 2020, after a drop in subscriber numbers in 2019.
At the end of 2018, there were 117.6 crore wireless phone subscribers in the country, which fell to 115.14 crore at the end of 2019. This contrasts with the continued year-on-year growth. another that has been observed in previous years. At the end of 2012, there were 86.47 crore subscribers, which increased to 117.6 crore at the end of 2018, a growth of 36%. Overall, over the 10 years, from 2012 to 2021, the growth rate was 33.5%. In fact, the trend of the past 10 years can be categorized into two distinct five-year periods. The first five years saw a higher growth rate which slowed down in the second five-year period from 2017.
A completely different scenario is observed in the case of wired connections, i.e. fixed connections in 2021. In the 10-year period from 2012 to 2021, this is the first time that the number of wired connections at the end of the year is higher than the previous year. After a year-on-year decline from 3.08 crore at the end of 2012 to 2.01 crore at the end of 2020, the number of wireline connections fell to 2.38 crore at the end of 2021.
BSNL’s market share in wireless subscribers falls below 10%
Over the past 10 years, the wireless telecommunications industry has been changing in India. While many service providers have exited the space, there have been new entrants and consolidations. We take a look at four of today’s leading wireless service providers and analyze subscriber trends over the 10-year period from 2012-2021.
BSNL: At the end of 2021, the total number of wireless subscribers of BSNL was 11.43 crores, or about 10% of the total wireless subscribers i.e. mobile subscribers in the country. Compared to the end of 2020, there is a slight drop in the number of subscribers, when it was 11.86 crores.
This decline in membership in 2021 ended the upward trend in BSNL mobile subscribers seen since 2015. The year 2014 saw the largest drop in wireless subscribers of 9.63 crores at the end of 2013 to 8.14 crores at the end of 2013. of 2014.
While the number of BSNL mobile subscribers in 2021 is higher than in 2012, BSNL’s market share among mobile subscribers in the country has increased from 11.5% in 2012 to 9.9% in 2021. Although Although BSNL ceded space to other operators, the decline was not dramatic during this period.
Bharti-Airtel: Amidst all the turmoil in the telecommunications industry, along with BSNL, Bharti Airtel has been a constant presence. In 2012, it had 18.19 million mobile subscribers and a market share of 21%. In the years that followed, he not only grew his subscriber base, but also increased his market share.
In 2020, it holds nearly 31% of the total market share with around 35.58 crore subscribers, second only to Reliance Jio, to whom it ceded its top spot in 2019. It should be noted that in 2018, all Tata Docomo users have been merged. with Airtel.
Reliance Jio: Reliance Jio has recorded impressive growth since its launch in 2016. By the end of 2016, there were 7.22 crore subscribers to Jio mobile services, which constituted a market share of 6.4%. This number doubled the following year, and Jio continued to add subscribers at a steady rate. The number of new Jio subscribers slowed down in 2020 and 2021. Nevertheless, at the end of 2021, Reliance Jio has 41.57 crore wireless subscribers, with a market share of 36%. Within six years of its launch, Jio not only added millions of subscribers but became number one in the Indian market.
Vodafone-Idea: At the end of 2021, Vodafone-Idea (Vi) holds a 23% market share and is the third supplier in the country. It came into being with the merger of Vodafone & Idea cellular in 2018. Prior to the merger, Idea grew its mobile subscriber base from 11.39 crore in 2012 to 19.65 crore at the end of 2017. During this period, Vodafone increased its number from 14.75 crore to 21.25 crore. With the merger, Vi’s total subscriber count at the end of 2018 was 41.87 crore, which was higher than Airtel and Reliance. However, Vi lost its subscribers over the next three years. Within four years (2018 to 2021) of the merger, Vi lost more than 35% subscriber base, which is more or less equal to the subscriber base added by Reliance Jio during this period.
A downward trend in wireline subscribers is largely due to declining BSNL subscribers
As highlighted earlier, with the exception of 2021, there is a continued decline in the number of wireline (commonly referred to as landline) subscribers. By the end of 2012, BSNL had 2.1 crore wireline subscribers, or about 68% of the total such subscribers in the country. The other major players in 2012 were MTNL followed by Airtel & Tata Tele.
In the years that followed, BSNL’s wireline subscriber base steadily declined. At the end of 2021, there were only 0.76 lakh BSNL wireline subscribers. Despite falling from 68% in 2012 to around 31% in 2021, it still retains the top spot as the country’s largest wireline provider among telecom companies. MTNL also experienced a drop in the number of wireline subscribers during this period.
Meanwhile, the decline is not seen among other major wireline service providers – Airtel, Tata Tele and Reliance Jio. While Airtel and Tata Tele have added wireline subscribers, they are not on the scale of falling BSNL subscribers to arrest the fall in overall wireline subscriptions.
Reliance Jio, as seen in the case of wireless subscribers, has significantly increased its subscriber base, even in the wireline category. At the end of 2018, it had 11 lakh subscribers which increased to 53 lakh at the end of 2021.
Significantly, there was a general increase in the number of wireline subscribers of all major players (BSNL, Bharti Airtel, Reliance Jio) in 2021.
Telecom space consolidation is the story of the last decade
In the case of wireless services, the data indicates that Reliance Jio has experienced exponential growth in the number of subscribers. Bharti Airtel has also added new subscribers. The increase in the subscriber base of these two players over the last four years (2018-2021), especially Reliance Jio, is not due to the expansion of the overall subscriber base but to the Vi’s loss of market share.
Consolidation has been the story of the telecom sector in India over the past decade. Speak end 2012there were 15 different service providers which dropped to 8 service providers by the end of 2021. While there could be 8 service providers providing wireless services by the end of 2021, the top 4 have a market share of over 99%. In contrast, the top 4 in 2012 held just over 65% market share.
The featured image: The telecommunications sector in India