Muted telecom user addition in April; rural sign-on up

Ayushi Kar Mumbai | Updated on July 14, 2021

Jio adds most active subscribers, modest gains for Airtel, while Voda continues to lose

The pandemic second wave moderated telecom subscriber addition in April to 2 million with over 80 per cent of them coming from rural markets. Analysts attribute the trend to the Covid lockdown that likely curtailed the purchase of smartphones.

People and migrant workers returning to their hometowns from urban centres may be the reason for net subscriber additions happening in rural markets.

According to a report by equity research firm Jeffries, Metro and A Circle cities saw a 3-4 million decline in active subscribers, possibly due to the rural migration. Active subscriber addition also moderated to 3.4 million in B and C Circles.

S P Kochar, Director-General, Cellular Operators Association in India, says the trend is temporary.

Work from anywhere effect

“This is a trend caused by Covid, caused by the work from anywhere culture. People working in metros have gone back home and are working from there, thus requiring these connections,” he said.

Kochar reckons that this trend is likely to have more or less levelled out and new additions are expected to come from areas that are going to start seeing network connectivity.

Telecom expert Hemant Joshi also agrees with this view. According to Joshi, the trend is evidence that network connectivity is improving in rural areas. “This was further accelerated by Covid, as rural residents had to connect to conduct their day-to-day affairs and businesses as lockdown persisted,” said Joshi.

According to a report by Emkay Global, Vodafone Idea (VIL) continues to hold the highest proportion of subscribers at 51.3 per cent, although the lead continues to narrow. Bharti posted its highest-ever expansion in rural subscriber base since April 2020, increasing to 49.2 per cent in April 2021. Jio’s rural base remained stable at 42.5 per cent. However, it was the only operator to see net additions in both rural and urban areas.

Lockdown impact

Despite rural gains, net subscriber addition moderated to 2 million. Analysts say lockdown restrictions across States may have hampered the production and sales of smartphones.

According to a report by Kotak Institutional Equities, across operators, there were healthy gains for Jio with modest additions for Bharti while VIL continued to lose subscribers. Jio added 4.8 million subscribers in April, lower than the 7.9 million added the previous month, due to the impact of lockdown to tame the second wave.

Bharti added a modest 0.5 million wireless subscribers on a net basis in April, sharply lower than an average of about 4 million over the past nine months. Nevertheless, it managed healthy traction in the mobile broadband segment, adding 2.2 million subscribers in April, though lower than the 3.6 million added the previous month.

VIL reported a net reduction of 1.8 million on its overall wireless base, as it lost subscribers in 19 out of 22 circles while gaining modestly in the remaining. It also lost 1.1 million subscribers in the mobile broadband segment versus a modest gain of 0.3 million the previous month.

Published on July 13, 2021

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