The Indian telecom industry lost 8.2 million subscribers during the month of April, while in lockdown. According to the report, the count is expected to increase further as the lockdown continues, adding new hurdles to customer addition in the sector,
In March, the decline in the subscriber count in the sector stood at 2.8 million. As the lockdown was implemented towards the end of the month, the decline was witnessed, says India Ratings and Research.
Bharti Airtel and Vodafone Idea witnessed the largest amount of loss to their subscriber base. Meanwhile, Reliance Jio saw growth in its subscribers.
“The industry-wide subscriber base declined month-on-month by 2.8 million and 8.2 million in March and April 2020, respectively,” according to the report.
The decline in subscriber bases can be attributed to Vodafone Idea Limited and Bharti Airtel. However, the loss was so huge that the growth of Reliance Jio during the same period is seen limited.
The report says that such a huge impact on the subscriber base is mainly due to the lockdown implemented towards the end of March-2020 and continued for the next month of April 2020. Besid es, due to the pandemic, the addition of new customers would remain under pressure for the next few months.
The COVID-19 lockdown has left a serious void in almost every major sector in the country. According to industry experts, the impact will contract GDP by 5 percent in FY 21. However, some predict a V-shaped recovery for the Indian economy, with growth touching 9 percent.
As the ‘work from home’ culture exploded during the lockdown, many professionals in the service sector are avoiding travel to their workplaces fearing the virus and are relying on telecom and internet connectivity.
But the report released by the agency doesn’t support the growth of broadband connections. The report said broadband subscriber bases declined by 11.1 million during the lockdown month of April, reportedly the first decline seen in the last two years.
The decrease in the broadband user base is also attributed to the Coronavirus lockdown. Shares of the overall base declined to 57 percent in April from 58 percent in the month prior.
The telecom industry is already facing the worst hit in history due to lower rates and fast-moving subscribers. Lockdown and the COVID-19 pandemic acted as a catalyst to worsen the situation in the telecom sector.
Further, the agency said tariffs carried out during December 2019 resulted in 11 percent growth in the industry. This growth may not be seen this year due to the huge dip in the number of active subscribers during March and April.
A move by the honourable Supreme Court, adjusting the gross revenue of the telecom industry is said to have hit Vodafone Idea the worst. Meanwhile, Bharti Airtel has sufficient liquidity to manage its dues and start reviving its base.