The free-everything fueled exodus of mobile Internet users to Reliance Jio is real: Airtel, India’s largest telecom operator, reported a massive quarter on quarter decline in every single mobile Internet statistic:

  •  Mobile Internet user base declined around 7.74 million (12%) quarter on quarter to 54.91 million from 62.66 million. This is even lower than the preceding three quarters, and on par with a year ago, when Airtel had reported 54.86 million mobile Internet users.
  •  Mobile broadband (3G+4G)base declined 9% (3.46 million) quarter on quarter, to 37.69 million from 41.33 million. Around half the decline in Airtel’s mobile Internet base was of broadband customers. This is still higher than the preceding quarter (Q1 FY17), where Airtel had reported 36.57 million mobile broadband users. Around 69% of Airtel’s mobile Internet users are broadband.
  • 2G customer mobile Internet base declined 19% (4 million) to 17.22 million from 21.32 million.
  • Mobile data consumption declined for the first time in many quarters: down by 6.3 million MBs (around 4%) to 171.81 million MBs during the quarter, from 178.12 million MBs. It is, however, higher than the preceding quarter (Q1 FY17), which was 158.03 million MBs.
  • Data ARPU (average revenue per user) declined 13% to Rs 175 from 201 in the preceding quarter. The last time Airtel’s Data ARPU was lower than this was December 2014, two years ago.
  • Average data usage per customer declined to 972 MB per customer, down 3% from 1000 MB last quarter.
  • Data realisation per MB declined to 17.97 down 10% from 20.08 MB last quarter.
  • Mobile Internet revenues declined 14% to Rs 3087 crore from Rs 3583.1 crore the previous quarter, and 3% year on year

There is no hiding this hiding from Jio in year on year comparisons, for a company that has shown quarter on quarter growth in mobile Internet metrics: not only has there been a decline in user base, there is also a decline in usage, realisation per MB.

A correction was needed in data rates to spur growth, but this is brutal. Reliance Jio’s business had gone live in the preceding quarter, but the impact is clearly being felt now. We wouldn’t be surprised of Q4 is any different, as Jio’s “welcome offer” continues till March 2017.

For the quarter, the Mobile Internet business accounted for 22.8% of Mobile India revenues, as compared to 23.1% in the corresponding quarter last year. In comparison, all of Airtel’s other businesses grew: 17.7% growth in Digital TV, 12.5% in Airtel Business and 10.8% in Homes on Y-o-Y basis.

Not much of an impact on voice

The impact of Jio is largely being felt on the data side. On the voice side, the interconnection issues created by incumbent telecom operators might have helped them. Quarter on quarter, minutes on network increased to 330.2 million from 313.4 million; voice usage per user increased to 419 minutes from 406 minutes. However, Airtel appears to had dropped rates to stem the exodus: Voice Revenue Per Minute declined to 29.42 paise, down from 32.43 paise per minute. Voice ARPU (albeit, an irrelevant figure in a multi-SIM environment), declined to Rs 123 from Rs 132. There was a consequent impact on mobile revenues as well, which declined to Rs 135.36 billion from Rs 145.06 billion.

On the overall business side


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