Reliance Jio, India’s largest telecom company, reported a new low in net subscriber additions during the Oct-Dec period, managing to add just about 4.4 million net new users during the final three months of the year.
This is the lowest net addition for any three-month period since the company started commercial operations four years ago.
The dip seen in Oct-Dec (third quarter) is not totally unexpected, and follows a trend of sharp decline in net user additions through 2020.
Around mid 2019, Jio was adding around 24 million net new users per quarter. By early 2020, this figure had fallen to 17.5 million per quarter, and fell again to 10.8 million for Apr-Jun and 7.3 million for Jul-Sep (see chart). The latest number of 4.4 million follows this trend.
Viewed in terms of overall numbers, Jio had a total of 405.6 million users (including 404.1 mln wireless) as of September end, and this increased to 410 million as of December end.
The 4.4 million users added during the last three months is likely to include around 0.5 million of new Jio Fiber customers. Jio Fiber is signing up 1.5-2.0 lakh new subscribers per month, making it the fastest growing wired network in the world.
Looked at another way, during the whole of 2020, Jio added 40 million net new subscribers, which is a 56% decline compared to the 90 million added in 2019.
The exact reason for the sharp decline in subscriber additions in 2020 is not clear, though the company has blamed the COVID-19 lock-down and disruptions caused by it.
However, even during the Apr-Jun period, when India was under a strict lock-down, Jio added around 10 million new wireless users, which is about 2.5 times what it added during the last three months of 2019. This indicates that the company has the ability to add new users even during a lock-down.
More likely, the decline in subscriber addition has to do with an increase in tariffs implemented by Jio in late 2019, which largely eliminated the pricing advantage enjoyed by the company in the market.
To make matters worse, rivals also rationalized their pricing structure and narrowed the gap further.
In fact, the title of India’s cheapest 4G operator has been held Vodafone Idea since early 2020 when the company started offering 4G data just Rs 2 per GB under its daily data plans. In comparison, the cheapest data plan from Jio prices data at Rs 3.57 per GB.
The increase in tariffs by Jio, accompanied by the withdrawal of the earlier ‘life-time free incoming’ facility by rivals, has led multi-SIM users in India to change their consumption habits.
Earlier, they used to use their existing phone number — usually from Airtel, Vodafone or Idea — to receive incoming calls only, while using a second SIM — usually from Jio — to make outgoing calls and data.
With the pricing gap between Jio and traditional operators disappearing and traditional operators scrapping the free incoming facility, these customers have been forced to choose one SIM and discard the other.
This has had several repercussions in the market.
For Jio, it has meant that the days of fast-paced growth are over, while for Vodafone Idea, this has translated to a large number of port-out requests.
However, it has also led to an increase in 4G data pack subscriptions on Bharti Airtel and Vodafone Idea.
The repercussions are also visible in the form of rising per-head data consumption, particularly on Airtel.
The Sunil Mittal-led company is far ahead of rivals as far as per-head data consumption is concerned, at over 16 GB per customer per month.
Jio’s per-head consumption numbers have turned out to be trickier to track.
As of early 2020, the per-head monthly consumption on Jio was 11.3 GB. Since then, it has become difficult to calculate this number due to the rising share of fiber-to-the-home customers in Jio’s overall subscriber mix.
Even though Fiber users comprise only 0.5% of the total subscriber base of Jio, they distort per-head consumption numbers in a big way. Each fiber customer can consume anywhere from 100-2000 GB per month, while a wireless user typically consumes only 10-12 GB.
Since Jio started adding a large number of Fiber users, Jio’s per-head consumption has risen from 11.3GB/month for the first three months of 2020 to 12.9GB/month for the final three months of 2020.