Consolidation has been the story of India’s Telecom sector in last decade
Sai Krishna Muthyanolla
May 9, 2022
Consolidation has been the story of the telecom sector in India in the last decade. By the end of 2012, there were 15 different service providers which decreased to 8 service providers by the end of 2021. While there may be 8 service providers providing wireless services by the end of 2021, the top-4 command a market share of more than 99%. In contrast, the top-4 in 2012 had a little over 65% market share.
India ranks second only to China in terms of the number of telephone users (both landline & telephone users) in the world. India’s tryst with telecommunication started in British India with the introduction of the Telegraph, witnessing a slow but gradual growth in post-independence India.
The establishment of C-DOT in 1984 was a landmark moment with encouragement for indigenous development of Telecommunication in India.  The Liberalization, Privatization & Globalization brought about in the 1990s ushered in a great change for the telecom sector & increased demand for telephone connections across the country.
The Telephone Regulatory Authority of India (TRAI) was set up in 1997 as the regulatory authority for the telecom sector followed by the setting up of Bharat Sanchar Nigam Limited (BSNL) in 2000. With the increase in demand for telecom services & the subsequent development & accessibility of better technology, the Government of India opened the telecom sector to private players for offering various services.
Over the years, despite a significant increase in the number of telephone users especially mobile users in the country, the number of subscribers of the state-owned BSNL has been declining.  The data provided by the Government in response to a recent question in Lok Sabha indicates the extent of this fall in BSNL subscribers.
In this story, we look at the trends in subscribers for BSNL & other operators in the country. The data considered for the story is based on the information available with TRAI.
Slower growth of Wireless subscribers over last three years
As per TRAI, by the end of December 2021, there were a total of 115.46 crore wireless telephone subscribers in India. This is slightly more than the 115.38 crores by the end of 2020. It is a continuation of slow growth observed in 2020, after a fall in the number of subscribers during 2019.
By the end of 2018, there were 117.6 crores wireless telephone subscribers in the country, which fell to 115.14 crores by the end of 2019. This contrasts with the continuous year-on-year growth that was observed in the earlier years. By the end of 2012, there were 86.47 crores subscribers which increased to 117.6 crores by the end of 2018, a growth of 36%. Overall, during the 10 years i.e., 2012 to 2021, the growth rate was 33.5%. In fact, the trend in the last 10 years can be categorized into two distinct five-year periods. The first five years witnessed a higher growth rate which slowed down during the second five-year period starting in 2017.
A completely different scenario is observed in the case of wireline i.e., Landline connections during 2021. During the 10-year period from 2012-2021, this is the first time that the number of Wireline connections at the end of the year is higher than the earlier year. After a year-on-year decline from 3.08 crores by the end of 2012 to 2.01 crores at the end of 2020, the number of wireline connections increased to 2.38 crores by the end of 2021.
BSNL’s market share in Wireless subscribers falls below 10%
Over the past 10 years, the wireless telecom industry is in a state of flux in India. While many service providers exited the space, there were new entrants & consolidations. We look at four of the major current wireless service providers and analyse the trends in the number of subscribers over the 10-year period of 2012-2021.
BSNL: By the end of 2021, the total number of wireless subscribers of BSNL was 11.43 crores, which is around 10% of the total wireless i.e., mobile subscribers in the country. Compared to the end of 2020, there is a slight fall in the number of subscribers, when it was 11.86 crores.
This fall in numbers in 2021 put an end to the increasing trend in the number of BSNL mobile subscribers observed since 2015. The year 2014 witnessed the greatest fall in the number of wireless subscribers from 9.63 crores by the end of 2013 to 8.14 crores by end of 2014.
While the number of BSNL mobile subscribers in 2021 is higher compared to 2012, the market share of BSNL among mobile subscribers in the country fell from 11.5% in 2012 to 9.9% in 2021. While BSNL did cede space to other operators, the decline was not dramatic during this period.
Bharti-Airtel: Amidst all the churn in the telecom industry, along with BSNL, Bharti Airtel has been a constant presence. In 2012, it had 18.19 crore mobile subscribers and a 21% market share. In the ensuing years, it has not only increased its subscriber base but also increased its share.
By 2020, It nearly has 31% of the total market share with around 35.58 crore subscribers, second only to Reliance Jio, to whom it ceded its top position in 2019. It has to be noted that in 2018, all Tata Docomo users were merged with Airtel.
Reliance Jio: Reliance Jio registered an impressive growth since its launch in 2016. By the end of 2016, there were 7.22 crore subscribers of Jio mobile services, which constituted a 6.4% market share. This number doubled in the ensuing year and Jio continued to add on subscribers at a steady pace. The number of new subscribers to Jio slowed down in 2020 & 2021. Nevertheless, by the end of 2021, Reliance Jio has 41.57 crore, wireless subscribers, with a 36% market share. Within six years of launch, Jio not only added crores of subscribers but became the number one in the Indian market.
Vodafone-Idea: By the end of 2021, Vodafone-Idea (Vi) has a 23% market share and is the third-largest provider in the country. It came into existence with the merger of Vodafone & Idea cellular in 2018. Prior to the merger, Idea has increased its mobile subscriber base from 11.39 crores in 2012 to 19.65 crores by end of 2017. During this period, Vodafone increased its numbers from 14.75 crores to 21.25 crores. With the merger, the total number of subscribers of Vi by end of 2018 was 41.87 crores, which was higher than both Airtel & Reliance. However, Vi has lost its subscribers over the ensuing three years. Within four years (2018 to 2021) of the merger, Vi lost more than 35% subscriber base, which is more or less equal to the subscriber base added by Reliance Jio during this period.
A declining trend in Wireline subscribers is largely due to the fall in subscribers of BSNL
As highlighted earlier, except for 2021, there is a continuous decline in the number of wirelines (commonly known as landline) subscribers. By the end of 2012, BSNL had 2.1 crore wireline subscribers which were around 68% of the total such subscribers in the country. The other major players in 2012 were MTNL followed by Airtel & Tata Tele.
In the ensuing years, the number of wireline subscribers of BSNL declined continuously. By the end of 2021, there are only 0.76 lakh BSNL wireline subscribers. Despite a fall in the share from 68% in 2012 to around 31% in 2021, it still retains the top position as the largest wireline service provider in the country among the telecom companies. MTNL also witnessed a decline in the number of wireline subscribers during this period.
Meanwhile, the decline is not observed in other major wireline service providers – Airtel, Tata Tele & Reliance Jio. While Airtel & Tata Tele added wireline subscribers, they aren’t at the scale of the fall in BSNL subscribers to arrest the slide in the overall wireline subscription numbers.
Reliance Jio, as seen in the case of wireless subscribers significantly increased its subscriber base even in the wireline category. By the end of 2018, it had 11 lakh subscribers, which increased to 53 lakhs by end of 2021.
Significantly, there was an across-the-board increase in the number of the wireline subscriber base of all major players (BSNL, Bharti Airtel, Reliance Jio) in 2021.
Consolidation of the telecom space is the story of the last decade
In the case of wireless services, data indicates that Reliance Jio witnessed an exponential growth in the number of subscribers. Bharti Airtel also added newer subscribers. The increase in the subscriber base of both these players in the last four years (2018-2021), especially of Reliance Jio is not because of the expansion of the overall subscriber base but because of the loss of market share of Vi.
Consolidation has been the story of the telecom sector in India in the last decade. By the end of 2012, there were 15 different service providers which decreased to 8 service providers by the end of 2021. While there may be 8 service providers providing wireless services by the end of 2021, the top-4 command a market share of more than 99%. In contrast, the top-4 in 2012 had a little over 65% market share.
Featured Image: India’s Telecom sector