GSM operators reported 8.7m (est.) net-adds in May vs. 9.4m in April; our May estimate assumes RCOM added 0.4m subs (same as in April) in its existing GSM (RTL) circles. Decline in overall net-adds was driven by BSNL (net-adds down by 0.6m; 56% mom) and Vodafone (0.2m; 35%). Idea’s net-adds recovered to 1.30m from 1.15m in April (+13%), while Bharti and Aircel reported stable net-adds.

Bharti Airtel’s 2.81m net-adds in May were unchanged vs. Mar and Apr, despite the entry of Idea, Aircel and Sistema-Shyam in some of the circles. We note that higher net-adds could be a potential source of surprise, as Bharti’s monthly net-adds continue to be significantly higher than our FY10 forecast of 2.3m. At the current run rate of 2.8m per month, Bharti’s total sub base would exceed our end-FY10 forecast by 5%.

Idea Cellulars net adds in May improved to 1.3m, after a sharp fall in April to 1.15m (from 1.5m in March) on the back of recovery in two large circles -UP (East) and Bihar. Its net-adds in these circles were under pressure due to competition from new entrants -RCOM (GSM) and Vodafone, respectively. However, Idea’s subscriber base in Delhi declined for a second straight month by 31K (48K in Apr), likely because of entry of Aircel (The latter added ~100K subscribers in both the months). Idea entered the Tamilnadu circle in the last week of May

Vodafone India net-adds continue to slide after hitting a peak of 2.86m in March. Over the last 10 months, VOD has expanded its footprint to 23 circles (pan India) from 16.