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Friday 10 April 2020

Telecom companies raise tariff; customers flee

Vodafone-Idea suffered the biggest loss of more than 3.6 million subscribers in the telecom market; Airtel and even Jio have suffered

Editorials

In India

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Troubled by a tax regime such as the adjusted gross revenue (AGR), as the companies raised tariffs, they realised how price-sensitive the market is. Although the tariff hike in December 2019 had led to better financial performance for telecom operators, for the first time since its launch of 2016, Reliance Jio reported a net increase of 82,308 subscribers far less than an average addition of 8 million subscribers every month. Bharti Airtel lost 11,050 subscribers while Vodafone-Idea lost 36 lakh subscribers.

The wireless telecom subscriber base declined by 28.8 million in November, according to data provided by the Telecom Regulatory Authority of India (TRAI). The loss was led by Vodafone Idea, which lost more than 36 lakh subscribers during November.

The circle of all categories in the wireless segment of the telecom market showed a monthly decline rate in its subscribers during the month of December. On an annual basis, only metro circles recorded an increase in their wireless subscribers.

During the month of October, Jio raised fees for calls outside the network. Reliance Jio mobile phone customers were required to purchase a top-up voucher to make outgoing voice calls to any non-Jio mobile number such as Airtel and Vodafone Idea. The two competitors followed suit.

Vodafone Idea sources confirmed that there was a sudden dip as the company reduced the time period for recording active subscribers from 120 days to 90 days. Sources said if it had been the same period, the number would have come down at the end of December. The loss number is, therefore, an expansion of 3.6 million following the new reporting format.

The number of telephone subscribers in India declined from 11,758.8 lakhs at the end of December 2019 to 11,724.4 lakhs from November 2019, i.e. a 0.29% monthly decline rate was observed.

Rural and urban subscribers accounted for 43.50% and 56.50% of total telephone subscribers at the end of December 2019. Wireless telecom membership in urban areas declined by 33.6 lakh at the end of December although wireless subscriptions in rural areas grew at a lower rate.

The Jammu and Kashmir services sector registered a maximum increase of 4.99% in its wireless subscribers during the month as telecom services in the region came back to normal after a few months of shutdown.

Reliance Jio is still the leading telecom operator in India, followed by Vodafone-Idea 28.89% and Bharti-Airtel with 28.43% subscribers. BSNL is the fourth largest telecom company in India with a market share of 10.26%.

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