In the previous year, India's mobile broadband (MBB) user base increased by a moderate 7.2% to 839 million, while the rate of additions quickened in August due to increased adoption of Reliance Jio's low-cost internet-enabled 4G phone.

 

The scenario underlines the challenges for telcos to entice featurephone users to upgrade to pricier plans that offer higher margins. Industry executives and analysts are, however, optimistic that the growth in 4G subscriptions will continue during the festive season and the rest of the financial year thanks to stable tariffs and fall in 4G handset prices, as per economic times. 

 

As per Telecom Regulatory Authority of India (Trai) subscriber data, India's non-MBB or '2G' user base shrank by almost 16% in the 12 months through August to 309 million.

 

“That India’s mobile broadband user base (primarily 4G) rose modestly during August 2022-23 suggests telcos continued to face challenges in pushing feature phone users to go 4G…. but the sharp growth in MBB user additions from August 2023 onwards suggests strong adoption of the Jio Bharat device,” Nitin Soni, senior director (corporates), at Fitch Ratings, added.

 

Based on executives and experts, conversions from 2G will drive 4G user additions, despite a 12% drop in 4G smartphone costs in recent months.

 

With headline rates unlikely to rise in the near future, the changes are critical to carriers' efforts to increase average revenue per user (ARPU). However, given the slow pace of upgrade, analysts believe Jio's attempt to upgrade all 2G subscribers to 4G may take some time.