Muted 2G to 4G conversions could limit data revenue growth for telcos in FY21: Analysts

With 2G to 4G conversions practically at a standstill owing to Covid 19 restrictions, overall growth in data usage and revenue for the likes of Bharti Airtel, Reliance Jio and Vodafone Idea may fall short of expectations in FY21, despite the current phase of higher mobile internet consumption, say analysts.
They added that telcos could partly offset the revenue impact by monetising higher home internet usage during the lockdown. But that too is likely limited as subscribers working from home have loads of unused data that they are carrying forward, and thus are unlikely to upgrade to higher valued 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 (average revenue per user) in FY21…this won’t happen…,” Sharma told ET.