Covid-19 takes a toll on telcos, 4G signups hit

Despite a spike in mobile internet consumption, overall growth for telecom companies Bharti Airtel, Reliance Jio and Vodafone Idea are expected to fall below expectations in FY21, especially with Covid-19 curbs bringing 2G-to-4G conversion to a grainding halt, analysts said.
Telcos could partly offset the revenue impact by monetising higher home internet usage during the lockdown, they said, but that too is likely limited as subscribers working from home have loads of unused data they are carrying forward and unlikely to upgrade to higher value plans.
Rajiv Sharma, research head at SBICap Securities, expects “a sharp fall in 2G to 4G smartphone conversions” as availability of 4G smartphones would be disrupted if the lockdown is prolonged. “These conversions may have added 15% on-year growth in overall data consumption and consequently, telco data ARPUs in FY21 but this won’t happen,” Sharma told ET.