According to report by Crisil, Bharti Airtel and Reliance Jio are at par with each other in terms of active mobile subscriptions, and hence the industry is unlikely to see any unanimous tariff hikes in 2021-22.
While Jio’s share in active subscriber base is 33.7 per cent, that of Airtel is 33.6 per cent.
The build-up in competitive intensity indicates that the industry is unlikely to see unanimous tariff hikes at least in the near term, limiting a large upside in average revenue per user (ARPU) in fiscal year 2022, the report noted.
Further, as per the report, currently there are around 250-300 million active non-4G subscribers, which will be on the radar of the telcos for conversion to 4G users in order to increase revenues.
That said, a price war like the one seen before 2019 is unlikely and competition will be indirect in the form of tie-ups with smartphone manufactures for low-cost phones, increased bundling of over the top (OTT) content and lower entry points for upgrade customers.
Crisil is of the view that individual players will most likely increase tariffs on selected plans given their immediate need to improve ARPU.
However, the onset of the second wave of the pandemic and the resultant restrictions is expected to slow down 4G subscriber additions in the current quarter, the report noted.
That said, the pace of additions would pick up gradually over the remainder of this fiscal as competitive intensity in the wireless-telecom market increases.
In the best case scenario, 4G subscribers may increase from 720 million in 2020-21 to 820 million by the end of this fiscal.
