Smartphone sales and lockdown are likely to affect the subscriber base of telecom companies. Besides, the initiative launched by telcos for the low-income group during lockdown so that users can remain connected is expected to affect it further.
Analysts Views On Subscriber Addition in June
The second wave on COVID-19 impacted the professional and middle-income category that were using data in bulk as per JM Financial Financial Services Group. The group also expects muted activity in the lower income group category. The report added that the users joined the network in June 2021 after the unlock.
"We expect Q1 FY22 to be a muted quarter in terms of subscriber additions and sequential ARPU growth across telcos," the report said. "We expect Jio/Bharti to add 8 million/2 million subscribers in Q1 FY22, while we expect VIL to report 7 million subscriber losses, driven by both consolidation in the lower ARPU subscribers and subscriber losses to other networks," it added.
Revenue Of Telecom Operator In Q1 FY2022
Apart from the subscribers' growth, the wireless revenues for the quarter are expected to tepid due to smartphone sales. The smartphone sales were affected due to lockdown as per another firm Emkay.
The report believes that India's largest telecom operator Reliance Jio might add 5 million customers, whereas Airtel growth is likely to be flat during the same period. It added that Vodafone-Idea might lose 4 million customers along with a decline in average revenue per user.
Similarly, ICICI Securities expects that the revenue of the first quarter of this financial year might be slow despite getting an extra day in the quarter. It said that 4G customers, less recharge, and lower users addition impacted the sector.
"Net profit for Bharti and Reliance Jio would be impacted by higher amortization and interest cost towards spectrum bought in Mar'21 auction," ICICI Securities said.
It is important to note that Reliance Jio is leading the sector, which is why is expected that its revenue might increase as it will be benefitted from the huge user addition. In addition, Airtel revenue is likely to grow further, whereas Vodafone-Idea revenue might decrease to 1.4 percent.