• Vodafone Idea drops down to third place in India’s mobile sector as the troubled joint venture continues to reel from Jio’s cut-throat, digital-infused competition.

ELSEWHERE IN ASSOCIATES & JVS

ELSEWHERE IN ASSOCIATES & JVS

Source: Nitin Mendekar / Unsplash

  • An update on wireless user numbers from India’s telecoms regulator confirmed Vodafone Idea has sunk to third place in the market, less than two years after entering operations with the largest share by far. The operator lost another 3.5 million customers during February 2020, leaving it with 325.5 million, according to the Telecommunications Regulatory Authority of India (TRAI) data. This saw it overtaken by Bharti Airtel during that month (+900,000, to 329.1 million), with leader Reliance Jio continuing to disappear off into the distance (+6.3 million, to 382.8 million). Jio took top spot from VfI in November 2019, and has also now displaced VfI as market-leader in all three of India’s major Metro circles: Delhi, Kolkata, and Mumbai (Vodafonewatch, #177, #182, and #186). VfI has long said it is pursuing a more selective approach to customer acquisition and retention, so is unlikely to be too perturbed by the customer losses on their own. Nonetheless, the scale of the exodus is gargantuan — and is a clear clash with Vodafone Chief Executive Nick Read’s focus on upping Vodafone’s commercial game and bringing down churn in its major markets (including a ‘single digits’ goal within Europe). The joint venture, which entered life at the end of August 2018, had 441.7 million customers at its inception so has now haemorrhaged more than a quarter of that base in less than two years. Jio has added 143.6 million users in the same period.
OperatorWireless subscribersMarket share
Indian ‘big three’ mobile operator wireless user base comparison, 29 February 2020
Source: TRAI.
Reliance Jio

382.8 million

32.99%

Bharti Airtel

329.1 million

28.35%

Vodafone Idea

325.5 million

28.05%

  • India’s Department of Telecommunications (DoT) proposed slashing licence fees on wired broadband services to try and stimulate demand and boost the economy. The changes will not hugely impact Vodafone Idea, as it has a tiny, 2% share of India’s broadband market (around 19 million subscribers in total, as of January 2020). Under DoT’s proposal, India’s operators will pay the government a nominal, INR 1 (£0.01/€0.01) licence fee annually for each wired broadband customer, as opposed to the current system of 8% of adjusted gross revenue (AGR) from their wired broadband businesses. DoT’s scheme had still to be approved by India’s Cabinet at the time Vodafonewatch went to press.