Broadband Internet, Reservoir levels and tripling of prices in Turkey
This Week In Data #32
In this edition of This Week In Data we cover:
The growth in fixed line subscribers in June
The rise of Jio and Airtel and the decline of BSNL and MTNL
The changing composition of internet users
Low water levels in major reservoirs
Interest rates at 25% in Turkey!
In case you missed, we published a DataSpot episode on the 6-years of GST few days back. You can check it our from here. Also, wouldn’t it be cool, if you could create your own custom dashboards on IndiaDataHub. And that too with just a few clicks? Releasing next week!TRAI released the telecom subscription data for June yesterday. After a blip in May when Fixed-line operators lost subscribers, their growth resumed. In June they added just under a million subscribers. April had also seen fixed-line operators add just under a million subscribers. In May though they had lost 22k subscribers. The growth in June was due to a new entrant – Andhra Pradesh State Fibernet Ltd, a government of Andhra Pradesh undertaking. It reported data for the first time and was responsible for 2/3rds of the fixed-line subscriber growth in June.
As a new state-owned telecom company emerges, the two existing ones continue to wither. Gradually. A good example of an asymptote. In the last 30 months, both BSNL and MTNL have lost 700k subscribers each. During that same period, Jio added just above 7 million subscribers while Airtel added just under 3 million subscribers. Jio has now more fixed-line subscribers than MTNL and BSNL combined. And Airtel has more subscribers than BSNL. At its current pace, Airtel will have more subscribers than both BSNL and MTNL combined by the end of this year. Tata Telecom is the 5th largest operator and after being in a slumber for a couple of years it has started galloping in the last few months. In the last quarter, it added over 700k subscribers, only marginally below that of Jio and almost 2x that of Airtel.
This entire increase in the fixed-line subscriber base reflects the demand for high-speed internet. While in absolute terms, an overwhelming number of users in India use the internet on their mobiles, at the margin there is a gradual shift towards fixed-line internet. In March 2020 for instance, 3% of internet users in India were fixed-line subscribers. As of March 2023, this has increased to almost 4%. Still small but growing much faster than mobile internet users.
What we also suspect is happening is that the fragmented broadband market is getting consolidated at the hands of the 3 large private telecom operators – Jio, Airtel and Tata – and the two PSU entities – BSNL and MTNL. The PSU entities are themselves most likely losing subscribers in large cities to the private operators where these operators now have a reasonable fiber network.
As we come towards the end of the monsoon season and with August turning out to be an especially weak month in terms of rainfall, the water level in reservoirs becomes important – both from the perspective of the Kharif crop as well as the upcoming Rabi crop where sowing will begin in October. This is especially so given the recent spike in food inflation. And the reservoir levels are not very high. As of 24th August, the water levels in the major reservoirs are 20% below that of last year. And it is below last year in every region except North India. South India is the biggest worry where reservoir levels are currently 40% below last year.
Not only is the reservoir level below that of last year but they are below the last 10-year average also. In both East and South India, the current reservoir level is 25% below the last 10-year average. And in Central India, it is just 2% above the 10-year average. Thus, the rains in September and the winter rainfall that the southern states receive become very important.
Globally also it was a quiet week on the data front. But Turkey stood out. Turkey’s central bank raised the policy rate by 750bps (yes, 7.5ppt) to 25% as it continues to battle inflation. Inflation printed at 48% YoY in July. And this 48% inflation comes on a base of 80% in July last year implying that the average prices in July this year were 2.6x that of July 2021. And relative to July 2020 prices have more than tripled. Ouch! In contrast to Turkey, the central banks of both South Korea and Indonesia kept rates unchanged at 3.5% and 5.75% respectively. Inflation remains modest in both these countries.
After a quiet week, the buzz of data flow resumes next week. Both in India and Globally. In India we will see the June quarter GDP data being released on Thursday and Friday will see the all-important US Non-Farm Payrolls data. See you then!