Telecom industry has lost 82 lakh subscribers during the complete lockdown in April, and COVID-19 pandemic will continue to keep customer additions under pressure, according to a report.
The decline in subscriber base during April was preceded by a loss of 28 lakh connections in March, which saw the lockdown being imposed towards the end, India Ratings and Research said in note.
The biggest losers were Bharti Airtel and Vodafone Idea, it said, adding sector leader Reliance Jio witnessed a growth in its base.
“The industry-wide subscriber base declined month-on-month by 2.8 million and 8.2 million in March and April 2020, respectively. The decline was attributable to a reduction in the subscriber base of Vodafone Idea Limited (VIL) and Bharti Airtel Limited, which has more than offset the growth in the subscriber base of Reliance Jio Infocomm Limited.
“The impact is due to the lockdown imposed after the outbreak of COVID-19 towards end-March 2020 and continued for the full month of April 2020. The addition in the subscriber base would remain under pressure in the coming months due to COVID-19,” it said.
The lockdown had a chilling effect on all the economic activities, leading to severe impact seen across sectors in the economy, where the GDP is set to contract by over 5 per cent in FY21 according to analysts.
Many professionals, especially those in the service industry, have taken to work from home amid the lockdowns as movements were restricted due to the threat of infections, and are relying increasingly on telecom and internet connectivity.
However, the agency’s report said broadband subscriber base declined by 11.1 million subscribers in April, the first month of decline in the last two years.
It attributed the dip in broadband subscribers also to the lockdown and added that their share of the overall base has declined marginally to 57 per cent in April from the level of 58 per cent in March.
From a revenue perspective, the agency said tariff carried out in December 2019 resulted in an 11 per cent growth in industry-wide revenue to Rs 402 billion in the March quarter as compared to the preceding three month period.
The momentum in revenue growth needs to be monitored, as besides tariffs, it is susceptible to movements in subscriber base – which declined in March and April 2020, the report said.
Meanwhile, on the latest adjusted gross revenue ruling of the apex court, it said Vodafone Idea is likely to be the worst hit as Bharti Airtel has sufficient liquidity to pay up the remaining dues at a go as well.