According to a recent report by Edelweiss, the coronavirus-driven lockdown and social distancing measures have led to higher dependence on digital tools, which in turn is driving demand for telecom services. Further, the financial impact on service delivery is expected to be very minute given the essential nature of communications offerings.

However, the lockdown is expected to arrest 4G subscriber addition and churn while accelerating SIM-consolidation.

The report also highlighted some distant risks such as the possibility of a prolonged economic slowdown which would erode consumers’ ability to spend; and the Indian telecom sector historically bearing disproportionate burden of government finances, which may continue in the current phase.

Further, it noted that a paradigm shift in consumer behavior is underway in the wake of the lockdown and social distancing measures. The lockdown has led to a surge in data demand globally and has triggered an uptick in the consumption of online content.

Such changes are expected to spur data demand structurally, increasing the wallet share of telecom services.

All in all, the report maintained a positive stance on the sector while flagging some risks which need to be watched out for.