Four mobile network operators provide wireless services to India’s 1.4 billion people. Reliance Jio, Bharti Airtel, Vodafone Idea, and government owned BSNL, account for over 99 percent of the country’s 1.143 billion wireless subscribers, as of the end of May, according to the Telecom Regulatory Authority of India (TRAI).
Reliance Jio is the largest MNO commanding 436.3 million subscribers or 38 percent of the market. (That’s more than the entire U.S. population.) Bharti Airtel, the second largest MNO had 372.3 million subscribers representing one-third of the market, and more subscribers than Verizon, AT&T and T-Mobile combined, as of the end of June. Third place Vodafone Idea (VI), the joint venture between the U.K.’s Vodafone Group and India’s Aditya Birla Group has 230.9 million subs or 20 percent of the market while government owned BSNL rounds out the Big 4 with 101.4 million wireless users and nine percent of the market.
What’s striking in the market dynamics among the four MNOs is that the two leaders, Jio and Airtel, with 71 percent of the market, are moving ahead with 5G deployments across the country and growing their respective customer bases at the same time. In May, Jio added 3.0 million subs and Airtel garnered another 1.3 million. These net adds were the combined result of network expansion and capturing customers from the two minor players. VI lost 2.8 million subscribers while BSNL dropped 1.5 million users in the month of May alone, according to TRAI.
BSNL is in the initial phase of launching 4G services at a time when Jio and Airtel are aggressively focusing on their 5G launch, according to The Economic Times. In this environment, it remains to be seen how BSNL will fare going forward.
5G rollouts are already leading to market share gains for Jio and Airtel. The launch of Jio Bharat, an internet-enabled phone from Reliance Jio, has generated enough interest and appeal from the market that it is likely to further erode VI’s subscriber base, The Economic Times reports. A continuing loss of subscribers for VI and BSNL following the Jio Bharat introduction could lead to a rapid shift in MNO market shares.
At the same time, VI’s financial straits are holding it back from mounting a viable competitive response. The company requires around $8-10 billion capital infusion to strengthen its existing 4G network and to launch 5G, The Economic Times reports. Despite the Indian government taking an equity stake in the firm, VI has not been successful in its own fundraising activities to date. Existing and potential new lenders and equity investors still are expecting a capital infusion from VI’s two JV partners first.
VI is American Tower (NYSE: AMT) subsidiary ATC India’s largest customer. VI’s financial predicament has resulted in delayed tower lease payments to ATC India. This situation has promoted American Tower to consider either reducing the stake in its Indian operations or to exit India altogether, Inside Towers reported.
Unless VI can raise the capital it needs in the near term to remain a strong contender, the wireless market in India could soon become a duopoly.
By John Celentano, Inside Towers Business Editor
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