NEW DELHI: Reliance Jio, Bharti Airtel, and Vodafone Idea’s subscriber churn to Bharat Sanchar Nigam Limited (BSNL) has started slowing down, IIFL Securities said on Friday.
“We gathered that the customer churn to BSNL observed in the wake of the July tariff hikes by the top 3 telcos has significantly slowed down, and some retailers already called out port-outs from BSNL to Jio and Bharti due to network quality issues,” IIFL said in a research note, basis a survey it conducted in the stores across villages and small towns in the Vidarbha region of Maharashtra.
The private sector telco incumbents had raised headline tariffs as much as 11-25% in order to invest sustainably in the fifth-generation (5G) networks and increase their average revenue per user (ARPU). BSNL, by contrast, did not hike tariffs, and reportedly, has no plans in the near future for the same.
As per IIFL, BSNL’s Rs 199 plan offers 2GB data per day for 28 days, at a 43% discount to a similar plan for Jio (Rs 349 plan for 28 days) and at a 47% discount to a similar plan for Airtel (Rs 379 plan for 30 days).
“The churn to BSNL has significantly slowed down recently due to its network quality issues. Some retailers even called out customers porting back to Jio and Bharti,” the brokerage remarked.
However, retailers expect the shift to BSNL may continue as customers may opt for its service once the validity of their current plan expires.
“This is particularly true for those who had recharged for longer validity plans just before the tariff hike,” IIFL said, adding that the customers shifting to BSNL are primarily from lower-income segments and small villages.
It is to be noted that BSNL is currently rolling out its commercial 4G services nationwide, while Jio and Airtel concluded their pan-India 5G deployments earlier in 2024. Vodafone Idea (Vi) is set to launch its commercial 5G network soon.
Jio, Airtel, and Vi continued to suffer major customer losses for the third month in a row in September, while the telecom PSU maintained its addition streak, following the July tariff hikes.
As per the subscriber data collated for September by the Telecom Regulatory Authority of India (TRAI), the wireless user base of Jio declined to 463.78 million as compared to 471.74 million in August. Similarly, Airtel’s user base decreased to 383.48 million as compared to 384.91 million in August and Vodafone Idea’s base was down to 212.45 million as compared to 214 million in August.
However, BSNL’s wireless base rose to 91.89 million as compared to 91.04 million in August.
IIFL cautioned that although rural and lower-income segment users can absorb the next round of tariff hikes, it could lower their spending on other items, and impact rural consumption.
“Most rural and lower-income segment users stated that the Rs299 plan for 28 days is too expensive. Another round of tariff hike may reduce their spending on other items, impacting rural consumption,” it said.
No comments:
Post a Comment