Telcos may see subscriber addition in Q2
Telecom firms are expected to add 20-30% more subscribers in the quarter to September, industry experts and analysts said, after the numbers fell in the April-June period due to the Covid-19 induced lockdowns.
Mobile phone operators are expected to push for recharges online, which have now increased to 60% of the total from around 30% before the outbreak, apart from reopening physical stores.
While Reliance Jio and Bharti Airtel are set to add subscribers, cash-strapped Vodafone Idea will face challenges due to its inability to invest in the network, the experts said.
Both Bharti Airtel and Vodafone Idea lost customers in June quarter compared to the January-March period, as the lockdown limited subscribers’ ability to recharge through physical stores and as sale of handsets fell sharply.
"By the next quarter end, the telecom sector will gain its subscribers by 20-30%. While Reliance Jio and Bharti Airtel will add subscribers, Vodafone Idea will face challenges in customer addition because of its inability to invest in the network," said Rajiv Sharma, research head at SBI Caps.
Vodafone Idea lost 11 million customers, while Bharti Airtel lost 3798 <<>> in the three-month period.
Analysts said even Reliance Jio’s growth -- which added 10.8 million subscribers -- would have higher if not for the pandemic.
As of June end, Airtel had about 280 million customers compared to 283 million in the December quarter. Vodafone Idea’s subscribers fell to 279 million, from 304 million in the October-December quarter of 2019.
Jio has bucked the trend, with 398.3 million subscribers now, from 280 million at the end of December.
Digital recharges will be the game changer and will help operators bag more subscribers, push them up the value chain and save costs, experts said.
In an earnings call, Gopal Vittal, CEO of Bharti Airtel, said the telco adopted a multi-pronged approach when supply chains were disrupted and there was a drop in smartphone sales, hurting conversions of 2G customers to 4G, and offline channel partners were shut.
It included “activating new channels such as grocers, pharmacies and ATMs as well as accelerating digital channels", Vittal said. "With these actions, we have begun to see business recover. Smartphone shipments are also back to pre-Covid-19 levels. Most of our stores are now open".
A no-physical-interaction process is likely to be the way forward for carriers going forward.
Telcos have already seen more than 60% of their customers recharge digitally as movements remain restricted. These recharges are taking place via ATMs, through SMS and associate programs. This is a big jump as digital recharges were an urban phenomenon before the pandemic struck, with just 30% of subscribers using the services.