Airtel’s active mobile Internet connection base and revenues declined for the first time in a very long time, in Q3-FY16, as the company reeled under the impact of Reliance Jio’s “Welcome offer”, or as Airtel called it, a “Slowdown in Mobile revenue growth primarily due to free voice and data offering by a new operator”. Mobile Internet revenues declined 14% to Rs 3087 crore from Rs 3583.1 crore the previous quarter, and 3% year on year
Airtel’s connection base grew by 5.8 million connections, but its Mobile Internet connection base declined around 7.74 million (12%) quarter on quarter to 54.91 million from 62.66 million, bringing it on part with the state a year ago (December 2015). Now only about 20% of Airtel’s connection base uses the Internet. At September 2016 end, this was 24.1%.
Airtel’s broadband (3G+4G) connection base declined by 3.6 million, its 2G connection base declined by 4.1 million. What’s noteworthy is that the number of connections not using the Internet increased by 13.1 million, which may, of course, include some of the 5.8 million connections it added during the quarter.
Broadband is now around 14.1% of total Airtel Mobile connections, and 69% of total Mobile Internet connections. In the previous quarter, Broadband connections were 15.9% of total connections, and 66% of Mobile Internet connections. 2G Mobile Internet connections account for 6.4% of total Internet connections; it was 8.2% at the end of the last quarter. 2G now accounts for 31% of total Mobile Internet connections for Airtel, down from around 34% last quarter.
Data volume declined for Airtel during the quarter, along with the decline in connections. Airtel users consumed 171.8 billion MBs of data during the quarter, down 3.5% quarter on quarter from 178.1 billion MBs last quarter. That’s a decline of 6.3 billion MBs (by around 4%), in a market where data consumption has been growing rapidly: this can only mean one thing: usage shifted elsewhere, and that is probably Jio.