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GSM net subscriber addition – June 2011
Cellular Operators Association of India (COAI) reported GSM subscriber data for June
2011, which continued its declining trend in this month as well. GSM subscriber data was
reported to be weak on mom basis across all operators (except BSNL). The net subscriber
addition number stood at 9.6mn, down 10% mom, taking the total GSM subscriber base
to 598.8mn.
Weakness across the board: In June 2011, net addition run rate on mom basis for all
operators (except BSNL) dropped steeply. Among the incumbents, Idea, after adding
2.5mn plus net subscribers every month from November 2010–April 2011, reported a
drop in its net subscriber additions to merely 1.4mn, down 24.8% mom. Also, net
subscriber addition numbers of Bharti, Vodafone and Aircel dropped by down 13.5%,
14.5% and 17.3% mom to 2.1mn, 2.1mn and 0.9mn, respectively. On the other hand,
BSNL, which was reporting mom decline in its subscriber additions since the last five
months, reported a 78.8% mom jump in June 2011 with net subscriber addition of 0.8mn.
Subscriber market share of all the incumbents remained almost flat mom – Bharti at
28.3%, Vodafone at 23.6%, Idea at 15.9%, BSNL at 14.8% and Aircel at 9.7%.
All the new operators reported a sharp decline in subscriber net addition numbers for June
2011. Uninor, DB Etisalat and S-Tel reported 17.4%, 37.1% and 7.8% mom decline in net
subscriber additions, with addition numbers of 0.9mn, 0.1mn and 0.2mn, respectively.
Loop Mobile emerged as the dark horse and reported a 30.8% mom increase in
subscriber addition at 0.02mn.
Circle-wise highlights: In June 2011, the net addition run rate of Metro circle declined to
0.7mn vs. 1.0mn in May 2011. In the Metro circle, in this month again Vodafone had the
highest net additions at 0.21mn, followed by Bharti and Idea reporting 0.17mn net
additions each. Subscriber addition run rate of B circle bounced back to 3.0mn from
2.4mn in May 2011. However, subscriber additions in B and C circles declined to 3.4mn
and 1.5mn from 4.0mn and 2.1mn in May 2011, respectively. This led to a considerable
decline in their net subscriber addition market share to 39.2% and 17.7% from 41.9% and
22.4% in May 2011, respectively.
For Bharti and Idea, this kind of cooling off in subscriber net addition was along expected
lines, thus our estimates remain unchanged. Bharti continues to be a better bet due to its
low-cost integrated model (owned tower infrastructure), potential opportunity to scale up in
Africa, established leadership in revenue and subscriber market share and relatively better
KPIs. However, we remain Neutral on the telecom sector.