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Reliance Jio hits Bharti Airtel’s data subscriber addition drastically

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Bharti Airtel posted a drastic drop in the number of new data subscribers today as it reported its operational results for the Apr-Jun quarter.

While Airtel added a total of 4.5 mln voice customers during the three months, it added less than 700,000 data subscribers during the same period.

In comparison, in the previous quarter (Jan-Mar), the company was able to add about 3.6 mln data subscribers and the quarter before that, 3.8 mln new data subscribers.

In fact, the drop of around 3 mln is too large to be accounted for by Reliance Jio. The total subscriber base of Jio was just 1.5 mln at the end of June.

In fact, the drastic slow-down would seem to suggest that Airtel is probably suffering from saturation or elasticity issues. Idea too had reported a marked slowdown in data growth when it reported results three months earlier.

Airtel and its peers Vodafone and Idea have extremely high data tariffs. In a country where the average person earns only around Rs 10,000 a month, 15 GB of data on these networks costs around Rs 2,000 — one fifth of his total income.

The declining data subscriber growth also made its impact felt Airtel’s other parameters.

For the first time in recent years, the percentage of Airtel subscribers who use both data and voice declined compared to the previous quarter.

Every three months, Airtel would report an increase in the proportion of its total mobile subscribers in India who were using data in addition to voice.

For example, in the quarter before the last one, it was 22.5%, which rose to 23.2% in the first quarter of this year (Jan-Mar period) (see chart.) A year earlier, it was just 19.5%.

The increasing percentage of users who were using data in addition to voice was seen as an inevitable movement given how data services were taking off in India.

However, this time, there has been a break with the precedent as the proportion of total customers who were using data services declined to 23.0%.

To some extent though, Airtel can take solace from the fact that per-capita consumption of data continued to increase as its subscribers increasingly moved from 2G handsets and plans to 3G and 4G plans.

An average data user on Airtel consumed 904 MB per month during the quarter, up from 859 MB in the previous three months.

Total data traffic, as a result, rose to about 53 million MBs per month.

However, by the middle of August, Reliance Jio is expected to have around 2.5 mln subscribers consuming a total of 75 million MBs — thus overtaking Bharti Airtel as India’s biggest wireless data service provider.

To overcome the issue of slackening data growth, Airtel slashed its data prices by around 30% earlier this month.

Airtel continued to aggressively roll-out 4G base stations, though exact numbers were not given. Airtel refuses to disclose the exact numbers of 4G base stations unlike Idea Cellular. It added almost 19,370 mobile broadband base stations (including 3G and 4G stations) during the three months. In the previous three months, it had added 18,900 such sites.

Four months back, Idea and Airtel were more or less tied when it came to the total number of 4G towers on the network, at around 14,000 apiece. It is likely that Airtel’s figure is now closer to the 25,000 mark. Idea’s numbers have not been announced yet.

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