Telcos to gain as 2G base shrinks

The loss of millions of 2G subscribers because of covid lockdowns is likely to improve Bharti Airtel Ltd’s and Vodafone Idea Ltd’s profitability as they will save significantly in fixed costs on servicing low-margin 2G users, analysts said. A fall in the number of low-paying 2G users could also boost the average revenue per user (Arpu).

The lockdowns led to an exodus of workers from urban to rural India following job losses, resulting in a fall in the 2G subscriber base.

Limited access to recharge centres also led to 2G service disruptions, as 4G customers prefer digital modes for recharge.