India’s top telecom operators are expected to be impacted in terms of new subscriber addition due to the country’s ongoing lockdown in various states. Analysts expect Reliance Jio and Bharti Airtel to add 2-3 million lesser customers in the April-June quarter as lockdowns limit movement in cities, thereby discouraging people from buying new SIM cards or shifting to another telecom operator.
As per a report by the Economic Times, lockdown and curfews across various Indian states will also impact revenues of telecom operators since offline recharges isn’t possible, and customers are being forced to recharge their numbers through online channels.
“The April-June quarter is a typical weak one, and curfews across states will prevent many from offline recharges. A shift to another network when one is completely dependent on their phone won’t happen,” a Mumbai-based senior telecom analyst was quoted as saying by the publication.
The analyst, however, believes that ailing telecom operator, Vodafone Idea, may see customer losses at a slower pace. The cash-strapped telco has been seeing subscriber loss since 2019.
Vodafone Idea, which is yet to announce its fourth-quarter result, lost 2.3 million subscribers in January. It closed the October-December quarter with 269.8 million subscribers.
On the other hand, Airtel added over 15 million subscribers in the December quarter to take the overall base to 336 million subscribers.
Mukesh Ambani-led Jio added 15.4 million and ended the January-March quarter with 426.2 million users. Jio reported average revenue per user (ARPU) of Rs 138.2 ($1.88) in the quarter.
A senior executive with a leading Indian telco told the publication that schools in the country have a two-month holiday, which will bring down recharges for online classes, thereby impacting revenues and average revenue per user (ARPU).
In the third quarter, Airtel and Vodafone Idea had reported ARPUs of Rs 166 ($2.26) and Rs 121 ($1.65), respectively.
To minimise the impact of lockdown on subscriber addition and ARPU, Bharti Airtel has started home delivery of SIM cards for customers.
Telecom services fall under “essential” services category, which means employees of telcos can move within the city to fix networks or deliver SIM cards to customers.
Last week, India’s Department of Telecommunications (DoT) had asked all states and union territories in the country to quickly provide permissions and clearances to network engineers working with telecom operators, tower companies and internet service providers to ensure seamless mobile and broadband connectivity as more states go under lockdown due to the new wave of COVID-19.
Bank of America (BofA) Securities separately said that the deadlier second spread and travel restrictions would impact subscriber net addition for telcos as well as consumer sentiment. “…we see the risks of potential tariff hike further pushed back…Vodafone Idea would be the most vulnerable given its weaker balance sheet,” it said in a note.
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