The impact of COVID-19 is continuing across different sectors in the country. The telecom sector has witnessed a massive loss economically during the entire lockdown period. Despite the effect, the leading telecom operator Reliance Jio had managed to gain profits amid the nationwide lockdown due to the outbreak of the coronavirus pandemic. The major loss witnessed in the COVID-19 crisis was low migration and the addition of new users to the 4G network.
From the beginning of the year till the end of June i.e., in the first quarter, some of the elements that hit an all-time low include migration and new user addition to 4G technology. The telecom firms had to come across a lot of issues in offering new SIM services and porting interruptions. As per the expectations of the market experts, the telecom sector might soon revive starting from the current quarter. As per the latest reports, the 4G subscriber base in the period between April and June has raised by slightly 1.7 percent compared to 5.3 percent in the first quarter of the year.
Rajiv Sharma, the Head of Research at SBICap Securities said, ‘We feel the slow growth in 4G subscriber addition is temporary because of the shutdown in retail.’ He further added, ‘The number will revive to 4% in the ongoing quarter (through September) and above 5% during the festive season due to increased smartphone sales and accelerated adoption of digital services caused by the pandemic.’
The Research Head Sharma said that by providing the SIM cards via contactless home delivery, the telecom operators can get through the previous quarter’s trail in adopting a 4G network. Due to the lockdown restrictions amid the COVID-19 pandemic, the telecom sector has gone through huge losses. Despite the fall, the addition of 4G customers has been on a drop for the last 2 years due to the ability of 2G or 3G feature phone users to migrate.
As of now, India has about 317 million users who access 2G/3G networks. Mukesh Ambani, the founder of the leading telecom firm Reliance Jio has been calling for ‘2G-mukt Bharat’. Reliance Jio has about 400 million 4G subscriber base in the country. In recent times, the company has collaborated with the tech giant Google to launch highly affordable 4G smartphones in India.
At the end of June, Bharti Airtel had 138.3 million while Vodafone Idea had 104.6 million 4G subscribers. Some of the analysts opine that 4G adoption is complicated for both the telecom operators. The reason is that the high-value 4G plans will raise average revenue per user [ARPU]. The aforesaid telcos have been already gaining low tariffs. If the ARPU increases, it will eventually make the tariffs hit the rock-bottom.
Neil Shah, the Research Director at Counterpoint Research said, ‘Out of 1.3 billion population, close to half a billion (including elders and kids) do not own a phone.’ He further added, ‘However, due to pandemic, we are seeing an increasing need for a phone for children above six years which is close to 180 million which is a completely blue ocean opportunity for everyone.’
More than 350 million existing users of feature phones and 60 million JioPhone users are likely to upgrade to 4G networks. Neil Shah said that such users would be the next target for launching an affordable smartphone from Reliance Jio and Google. We might soon witness more and more developments in the telecom sector. Stay tuned to this website to get the latest updates about the telecom news, tech-related updates, upcoming telecom services, and more.