Jefferies and Morgan Stanley have provided insights into the telecom sector’s dynamics, highlighting the ongoing shifts in subscriber base and market shares among key players.
Jefferies’ Take:
- Subscriber Base Growth: The sector’s active subscriber base grew significantly by 6.8 million MoM in October 2024. Bharti Airtel, Jio, BSNL, and MTNL emerged as gainers.
- 4G/5G Subscribers: Despite the overall growth, the 4G/5G subscriber base fell in October, primarily due to Jio weeding out inactive 4G customers.
- Premium Customer Additions: Bharti Airtel led the data subscriber additions, indicating a better and more premium customer mix compared to peers.
- Vodafone Idea’s Struggles: VodaIdea continued to lose subscribers, with Jefferies projecting Bharti and Jio to gain further market share in the near term.
Morgan Stanley’s Take:
- Industry Subscribers Decline: The industry subscriber base declined for the fourth consecutive month to 1,150 million (-3.3 million). Airtel, however, increased its share and narrowed its market share gap with Jio by 100 basis points over the last four months.
- Market Share Breakdown:
- Jio: 40% (-21 bps)
- Bharti Airtel: 33.5% (+26 bps)
- Vodafone Idea: 18.3% (-12 bps)
- Others (including BSNL): 3.6% (-14 bps)
- Wireless Data Subscribers: Airtel’s market share in wireless data subscribers rose to 31.1% (+37 bps) compared to Jio at 51.3% (-19 bps) and Vodafone Idea at 14% (-4 bps).
Both brokerages agree that Bharti Airtel has been a key beneficiary following the recent tariff hikes, attracting a premium customer base and gaining market share, while Vodafone Idea continues to face challenges with subscriber losses. Jio’s strategic cleanup of inactive customers signals a focus on improving customer quality.
Disclaimer: This report is based on Jefferies’ and Morgan Stanley’s analyses and is for informational purposes only. It does not constitute financial advice or recommendations to buy or sell stocks. Investors should conduct their own research or consult a professional advisor before making investment decisions.