This report provides details about data provided by TRAI on monthly basis.

1. TRAI TELECOM DATA & ANALYSIS JULY-2019

2. The Indian telecom industry has undergone consolidation over the past three years as it has shrunk from a 13-player
market to a 5-player market: 3 private and 2 public telcos. The data released by the Telecom Regulatory Authority of
India (TRAI) tracks the changes in the telecom market between June and July 2019. More details about the reports are
as follows:
• Vodafone Idea Ltd (VIL) led the market with 32.53% market share, followed by Reliance Jio (RJio) in the 2nd position with 29.8% and
Bharti Airtel at 3rd with 28.12% market share. TRAI shows VIL with 380 million subscribers, followed by RJio with 339.8 million,
and Airtel with 328.5 million subscribers.
• RJio added 8.5 million subscribers, whereas BSNL added just over 290,000. RJio added subscribers in 18 circles out of 22, while VIL lost
share in 19 circles. All other operators continued with their losing streak.
• The Tata Teleservices acquisition helped Bharti Airtel increase subscriber base by 8.2mn MoM. However, on like-for-like basis, it declined
by 2.6mn. VIL continues to lose subscribers to 3.4mn versus 4.1mn in June.
• Mobile broadband subscriber addition remains weak for Bharti and Idea at 2.5mn and 0.4mn versus 3.1mn and 1.5mn respectively in
June.
• 5.92 million subscribers submitted their requests for Mobile Number Portability (MNP). With this, the cumulative MNP requests
increased from 441.49 million at the end of Jun’19 to 447.41 million at the end of Jul’19 since implementation of MNP.
• Number of active wireless subscribers on the date of peak VLR in Jul’19 was 972.38 mn. The overall teledensity in India increased to
90.23% at the end of July.
Key Highlights of Telecom Data as on 31st July 2019

3. Key Updates on Telecom Industry:
 TRAI re-open's IUC cut-off date - TRAI has released a consultation paper on whether the Jan 2020 timeline to move to zero IUC charges
should be changed. TRAI had in 2017 cut the IUC rates from 14p to 6p and set Jan 2020 as sunset date for IUC to become 0. It is now asking
for views on whether this date needs to change. The telecom authority cited the lack of migration on 4G and the imbalance of off-net
traffic between operators as reasons for reconsidering the applicable date. A delay is positive for Bharti/VIL, negative for R as the charge is
a source of revenue for older in the short term as Bharti/VIL earn good share of their revenue from IUC (interconnection usage charge) .
IUC cut to zero would have meant that incumbents make no money for receiving calls on their networks.
 A panel of the DoT working on the price and auction modalities for 5G spectrum is yet to finalize its report, it is still under examination.
There will be some demonstration of 5G technology at India Mobile Congress event which is scheduled to start from October 15.
 TRAI has sought views on the maximum call ringing time permissible to ensure optimal usage of phone network resources, including
spectrum. Ring time in mobile networks is typically, 30-45 seconds, while for landline networks, it hovers between 60 and 120 seconds. The
deadlines for stakeholder comments and counter-comments for Trai’s new discussion paper are September 30 and October 7 respectively.
 Reliance launched its fibre-to-the-home service Fiber across the country in an effort to get a foothold in the broadband segment.
 Bharti Airtel Ltd has launched a converged platform called 'Airtel Xstream', which features a host of entertainment services and devices.
 Bharti Airtel Ltd has partnered with Bharti AXA Life Insurance to provide life insurance cover of 400,000 rupees along with its prepaid
recharge pack of 599 rupees.
 The DoT has proposed a 500-bln-rupee package to revive state-owned telecom BSNL and MTNL, over a 10-year period for a voluntary
retirement scheme, 4G spectrum, and working capital.
 Tata Comm and CreditPilot in pact to offer digital services to telecom companies.
 RComm moves NCLT against DoT to seek status quo on spectrum license.
 Vodafone Idea offers more data in 255-rupee plan to counter Airtel.

4. Access Service Provider-wise Market Shares in term
of Wireless Subscribers as on 31st July 2019
29.08%
32.53%
28.12%
9.98%
0.29% 0.002%
Market Shares of Wireless Service Providers
Reliance Jio
Vodafone Idea
Bharti Airtel
BSNL
MTNL
Reliance Com
116546 116831
65727 65987
50819 50845
0
20000
40000
60000
80000
100000
120000
140000
Jun-19 Jul-19
Total wireless subscribers (in mn)
Total Urban Rural
Total wireless subscribers (GSM, CDMA & LTE)
registered a monthly growth rate of 0.24%. Monthly
growth rates of urban and rural wireless subscription
were 0.40% and 0.05%, respectively.
As on 31st July, 2019, the private access service
providers held 89.73% market share of the wireless
subscribers whereas BSNL and MTNL, the two PSU
access service providers, had a market share of only
10.27%.

5. 56.48%
43.52%
86.60%
13.40%
57.01%
42.99%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
Share of Urban Subscribers Share of Rural Subscribers
Share of Urban and Rural Subscribers in Jul’19
Wireless Wireline Total
The number of telephone subscribers in India increased from 1,186.63 million at the end of Jun-19 to 1,189.28 million at the end of Jul-
19, thereby showing a monthly growth rate of 0.22%. The Urban subscription increased from 675.58 million at the end of Jun-19 to
678.02 million at the end of Jul-19 and the rural subscription also increased from 511.05 million to 511.25 million during the same
period. The monthly growth rates of urban and rural subscription were 0.36% and 0.04%, respectively during the month of Jul-19.

6. 1,182
1,184
1,162
1,162
1,162
1,165
1,168
340
340
325
322
320
320
329
415
409
395
393
388
383
380
289
297
307
315
323
331
340
0
200
400
600
800
1,000
1,200
1,400
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19
Total subscribers (mn)
Industry Bharti Airtel Vodafone RJIO
RJio’s subscriber adds in Jul’19, mostly came from Delhi, Rajasthan, and UP (E) could be attributable to high growth in the previous month
and the completion of the Cricket World Cup and IPL. RJio gained significant market share from VIL due to the latter’s still ongoing network
integration and upgradation.
Bharti Airtel’s gross subscriber base increased. BHARTI is likely to benefit from TTSL merger revenue contribution and network cost
efficiencies. The highest net active subscriber addition came from Delhi. The acquisition of Tata Teleservices helped boost Bharti’s
subscriber base. However, adjusting for the acquisition, the subscriber base declined 2.6mn versus no change in June.
Growth in Wireless Subscribers

7. 0.5
-0.4
3.6
2.8
-3.3
-1.5
0
-2.6
-1.6
-5.7
-4.1
-3.4
8.1
8.2
8.3
8.5
Apr-19 May-19 Jun-19 Jul-19
MoM subscriber additions (mn)
Industry Bharti Airtel Vodafone RJIO
Vodafone-Idea’s net active VLR (Visitor Location Register) subscriber base declined. VLR subscriber base saw a sharp fall MoM, which
impacted VLR subscriber losses. The lowest 4G coverage among its peers, ongoing network integration and minimum recharge plans could
be attributable to its continued subscriber losses. The company has reduced its minimum ARPU plan from INR35 to INR20, which we
expect to arrest subsequent decline in the subscriber base.
Growth in Wireless Subscribers
2.58%
0.25%
-0.17%
-0.78% -0.88%
-1.32%
Service Provider-wise Monthly Growth Rate
of Wireless Subscribers
Reliance Jio BSNL MTNL
Bharti Airtel Vodafone Idea Reliance CDMA

8. Bharti and VIL lost 4.9mn and 0.7mn (mom) in rural subscriber base, respectively, whereas RJio gained 5.6mn. The rural subscriber base of
Bharti and VIL stood at 42% and 52%, respectively. Rural subscriber base for Bharti and VIL has been on a declining trend for the last 8-10
months, which can be attributed to the introduction of minimum recharge plans.
Rural subscriber base on a downward trend for
Bharti and VIL

9. Service Area-wise Monthly Growth Rate of Wireless
Subscribers - July’19

10. VIL: Trend in adjusted AGR and GR growthBharti Airtel: Trend in adjusted AGR and GR growth
RJio: Trend in adjusted AGR and GR growthIndustry: Trend in adjusted AGR* and GR* growth
AGR*- Adjusted Gross Revenue, GR*- Growth Rate

11. Broadband (≥ 512 Kbps download) Subscribers
Segment–wise Broadband Subscribers and Monthly Growth Rate- July 2019
Segment
Broadband subscribers (in million)
Monthly growth
rate in the month
of Jul-19As on 30th July
2019
As on 30th June
2019
Wired subscribers 18.52 18.42 0.56%
Mobile device user (Phones and dongles) 585.05 575.63 1.64%
Fixed Wireless subscribers
(Wi-Fi Wi-Max Point-to-Point Radio &
VSAT)
0.55 0.54 1.33%
Total 604.12 594.59 1.60%
As per the reports received from 324 operators in the month of Jul’19, the number of broadband subscribers increased from 594.59 mn at the
end of Jun’19 to 604.12 mn at the end of Jul’19, with a monthly growth rate of 1.60%.
Segment-wise broadband subscribers and their monthly growth rates are as below:

12. Top five service providers constituted 98.95% market share of the total broadband subscribers at the end of Jul-19.
Reliance ’s fibre-to-the-home service Fiber across the country in an effort to get a foothold in the broadband segment will exert pressure on
peers such as Bharti Airtel and Mahanagar Telephone Nigam.
Bharti Airtel’s mobile broadband subscriber addition momentum slowed due to seasonality, which was also reflected in 3.6mn QoQ decline
in active subscriber base.
Service Provider-wise Market Share of Broadband
(wired + wireless) Services as on 31.07.2019
56.25%
20.52%
18.36%
3.58% 1.29%
Reliance Jio Bharti Airtel Vodafone Idea BSNL Others
339.79
123.94
110.92
21.64
7.83
Reliance Jio Bharti Airtel Vodafone Idea BSNL Others

13. MNP requests have moderated a bit in recent months after peaking out in Jan’19 due to the introduction of minimum recharge plan. In
MNP Zone-I (Northern and Western India), the highest number of requests till date have been received in Rajasthan (about 35.24 mn)
followed by Maharashtra (about 33.04 mn) service area. In MNP Zone-II (Southern and Eastern India), the highest number of requests till
date have been received in Karnataka (about 41.44 million) followed by Andhra Pradesh (about 37.84 mn) and Tamil Nadu (about 37.67
mn).
Mobile number portability requests
418
423
428
433
437
441
447
400
405
410
415
420
425
430
435
440
445
450
MNP Requests (mn)
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19

15. Impact of RJio Fiber Vs Airtel V-Fiber
The launch of RJio’s fiber-to-the-home (FTTH) services has had a limited impact on BHARTI. In fact, the company cited that 35-40% of
renewals have been on annual plans over the last few months. In our view, RJio’s foray has not been as disruptive for BHARTI as the latter
boasts of a strong product portfolio and has a limited price differential with the former.
The plan comparison of RJio Fiber and Airtel Xstream Fiber is as below:
RJio Fiber: The Fiber plans from Reliance start from Rs 699 for 100 Mbps speeds and 100GB broadband data. This is a basic plan and RJio is
offering free calls with the landline connection, free 4K Set Top Box for accessing OTT and Jio apps. The plan will also give access to TV video
calling, gaming, home networking service and Norton device security for five devices. The Platinum Plan also come with VR headset and offer
First Day-First Show movies and other premium content.
Airtel V-Fiber: The biggest competitor of JioFiber is Airtel's V-Fiber broadband and the company's plans start from Rs 799 for speeds of up to
40 Mbps and 100GB broadband data. The 100 Mbps plan called 'Entertainment' starts from Rs 1,099 per month with 300GB broadband data.
The plan offers a subscription to Amazon Prime Video, Netflix, Zee5 and Airtel Xstream for free. All of the Airtel V-Fiber plans provide
additional data benefits with 6-months validity.

16. Corporate Tax Effect on Telecom Sector
The reduction of corporate tax to 25% , from 35%, brings little cheer to telecom companies given their continued losses, which make the tax
cut irrelevant to them. In long term it will help its smartphone industry expand and research and development (R&D) investment and attract
higher-value component makers to the world's second-biggest smartphone market.
Bharti Airtel & Vodafone Idea (VIL) will see a small benefit with this tax cut, on cashflow basis in the mid term. Bharti Airtel and VIL are loss-
making and are not required to pay taxes. Tax cut for Bharti Infratel is expected to aid Bharti Airtel. VIL would see higher losses due to lower
deferred taxes. Reduction in net profit for Bharti Airtel would be higher than VIL due to higher effective tax rate.
RJio is currently on the MAT tax rate and would benefit from the reduction in MAT. P&L tax rate for RJio is 35%, but that is due to the high
deferred tax liability creation (accelerated depreciation in income tax books). Due to the high depreciation in income tax books, carried forward
losses for RJio are still increasing. Retail operations are at a marginal tax rate and will likely transition to the 25% tax regime. Retail operations
have one more year of using carried-forward losses and are at a marginal tax rate in income tax books, and therefore would benefit from the
reduction in marginal tax rate from 34.9% to 25.17%.
Tata Communications (TCom) will see some benefit. Though TCom on a consolidated basis has not been generating huge profit before tax, it
does make a profit in the standalone entity and its two India subsidiaries -- Transformation Services and Collaboration Services -- while it incurs
a loss in one subsidiary.
We expect telecom stocks to trade higher in short term, aided by the government's decision to cut corporate tax rate that are incorporated
from next month. Such a move is expected to give boost to manufacturing of telecom equipment in the country in the long term. Companies
may potentially pass on part of the savings in the form of discounts or price reductions to revive demand, especially in the current context of
subdued consumer demand. RJio, on account of network superiority, will continue to add subscribers as smartphone penetration increases in
semi-urban/rural areas. Bharti Airtel and Vodafone Idea are expected to remain subdued on account of persistent pressure on their debt profile
and intense competition from RJio which have led to loss of subscribers and market share. Competitive intensity in the industry has remained
elevated with RJio's data tariffs being 25-30% lower than those of Bharti Airtel and Vodafone Idea Ltd.

17. Disclaimer
Prepared By:
Research Associate: Nawanit Kumar Pandey
Email ID: nawanitpandey@adroitfinancial.com
Phone Number: 0120-4550300*270/388
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