Telcos find some relief in lockdown, revenues rise 15% as usage picks pace

Telcos estimate that they will end the current financial year with revenue growth of 10-12 per cent as data usage continues to grow
Revenues of telecom companies are estimated to have grown by 15 per cent in the quarter ended March 31 compared with the previous quarter, thanks to a surge in data consumption as a large number of office workers shifted to work from home and people were forced to stay indoors owing to the coronavirus pandemic.
Based on feedback from its members, which include Bharti Airtel, Vodafone Idea, and Reliance Jio, among others, the Cellular Operators Association of India (COAI) said the average revenue per user in Q4FY20 would be Rs 140-145, up from Rs 124 in the December quarter. 

“The increase in revenues has primarily been because of a spurt in demand for data. (Telecom) traffic jumped by 15 to 30 per cent in March as the lockdown was followed by work from home. This is despite the fact that the net subscriber addition for March was only 0.5 million, as against an average of 2.5 million per month, due to the lockdown and limited scope for adding fresh subscribers,” Rajan S Mathews, director general, COAI, said. 


Revenues, he said, would have been even higher if telcos had not given Rs 600 crore worth of freebies, in terms of more data and minutes of usage, to customers at the same price after the Covid-19 outbreak.

Telcos estimate that they will end the current financial year with revenue growth of 10-12 per cent as data usage continues to grow, with online e-classes in schools being kicked off. They also do not see any decline in the number of subscribers due to the economic crisis as mobiles have become the only essential source of communication. And once the lockdown is lifted, net addition per month is expected to become normal.
According to COAI projections, telcos will hit an ARPU of around Rs 180 by the year end, close to their pre-Covid estimates of Rs 200, which assumed there would be another price hike. 

Telecom service providers could be close to that target despite the fact that a tariff hike looks difficult and can only happen if the economy stabilises after the spread of Covid-19 is contained.

Capital investment in FY20 is expected to be $ 3-4 billion, or half of what it was last year at $6-8 billion. Matthew said it was because most of them had completed their 4G investments, and that fresh investments would only be required for auctions and 5G. “If the auction happens at all, it will not be before the fourth quarter of this financial year,” he added.

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