According to a report by India Ratings and Research, fundamentals of the country’s telecom sector improved in the quarter ended (QE) March 2020 on the back of price hikes in December 2019, ability of telcos to reduce customer churn and more subscribers opting for 4G.
Further, the report stated that COVID-19 related lockdown has provided another strong fillip to the ongoing trend of 2G and 3G customers transitioning to 4G, driven by the needs of higher data download speed and limits.
Overall, operational trends continued to improve for the telecom sector during the quarter with average revenue per user (ARPU) for Airtel, Vodafone Idea Limited and Reliance Jio rising 14 per cent, 11 per cent and 2 per cent, respectively on a quarter on quarter basis, the report said. The rise in ARPU was driven by a 20 per cent tariff hike undertaken by telcos in December 2019 and continued transition of customers from 2G/3G to 4G, it stated.
Additionally, India Ratings noted that Bharti Airtel’s 4G base has risen 57 per cent, Vodafone Idea’s by 31 per cent and Jio’s by 26 per cent as compared to the same period year-ago. According to the report, Reliance Jio continued to gain subscriber market share even in QE March 2020 but the pace of market share acquisition has slowed markedly in recent quarters amid declining competitive intensity in the sector.
Talking about future trends, the report said that internet traffic has seen an 11 per cent increase in April 2020, which will augur well for telcos on the data usage front. The increase in data usage was due to a higher activity on aspects like movies and gaming during the COVID-19 related lockdowns, it added.