“Though we lost out on data and voice consumption in offices and conference rooms, a whole new segment got created overnight due to work-from-home and online schooling. We had never thought of this. Children and young students are the fastest-growing segment now,” a spokesperson for a leading telecom company told Business Standard on condition of anonymity.
Who eats chips the most? Kids and teens! Data with chips, thus, makes sense.
But apart from creating opportunities, the lockdown hit hard on the lives of migrants who had no option but to go back to their hometowns or villages, from the metros where they earned their livelihood. Uttar Pradesh, Bihar, West Bengal, Assam, Madhya Pradesh, to name a few, are the sources for labour migration, as Mumbai and Delhi, among others, absorb them.
It is these source-states of Indian labourers that have shown a spike in revenues for the major telcos (see chart). For Jio, West Bengal, Maharashtra, Bihar, MP and Odisha gave the biggest boost in the June quarter. For Airtel, the boosters were UP, Kerala and Assam.
Vodafone-Idea, on the other hand, lost to these two operators in this quarter. In most regions, including big ticket consumption areas such as Delhi, Mumbai and Bengaluru, its revenues contracted from the previous year. It showed single-digit growth in Kerala, Gujarat, Punjab and Haryana.
In general, big economic centres gave a milder revenue growth than the populous and weaker states. But in that, Jio, and partly Airtel, took away nearly a fifth of the customer base of Vi, making the latter a net loser in Q1 (see chart).
What is worth noting, however, is that growth in Airtel’s revenue continued to be the strong path after poor improvements a year ago. On the contrary, Jio’s revenue growth was strong, but on the decline compared to the previous quarters.
Both of them saw a jump in two indicators: data consumed per user, and average revenue realised per subscriber (ARPU). Vi, while riding successfully on the data consumption wave, faced a decline in ARPU. Nonetheless, VI still managed to earn about Rs 16,300 crore in the June quarter, not too low from its level a year ago.
There are some facets of this telecom success story that go unnoticed in data. The growth across states in difficult times has been lifted up by the middle and top rung consumers.
“Bottom of the pyramid subscribers faced income losses. A subset of them, migrants living hand-to-mouth in cities, tended to use less data while at home,” said a telecom executive, who did not wish to be named.
On the same lines, Airtel’s quarterly data presented to the stock exchange shows that it lost 3798 customers in the June quarter. But the data consumption of the existing customers grew by more than 10 per cent over the previous quarter (see chart).
Though seemingly happy about the way the telecom sector is performing well when the economic situation is not so good, executives said that there is no clear idea on when will the data consumption from offices revive.
“While the June quarter showed a pleasing spike, it has moderated in the September quarter. Revival in economic activities is crucial for sustaining the trend,” said the first executive quoted.