Mobile subscriber base to recover: Telecom analysts

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Telecom analysts are of the opinion that India's wireless (mobile) subscribers count is back to recovery.

India's mobile subscriber base shrank by nearly 2 crore between March'20 and June'20.  As per the Telecom Regulatory Authority's (TRAI's) subscription report for the month of June, India's mobile subscriber count stood at 114 crore during the peak of the Covid-19 pandemic in the country.

As per the telecom watchdog's March subscription report, India's mobile subscribers base was 116 crore at the end of FY20.

As per the latest data furbished by TRAI, the mobile subscriber base has risen to 115.2 crore at the end of October 2020.

Analysts are of the opinion that India lost 2 crore subscribers on account of worker's migration back to their villages and hometowns on account of the Covid-19 pandemic-induced lockdown.

The fall in subscriber base was mainly a result of reverse migration from urban to rural areas owing to lockdowns from March. In Q1FY21, urban areas have seen a fall of nearly 1.8 crore while rural areas gained over nearly 0.2 crore resulting in subscriber base falling to 114 crore.

"The fall in subscriber base was mainly a result of reverse migration from Urban to rural areas owing to lockdowns from March. In Q1FY21, urban areas have seen a fall of ~1.8 crore while rural areas gained over ~0.2 crore resulting in subscriber base falling to 114 crore," said Isha Chaudhary, Director, CRISIL Research.

"While we expect the subscriber base to return to base, however, the dual sim consolidation in urban areas will partially offset the increase, resulting in an overall subscriber base at around 115-115.5 crore. Compared to last fiscal, we anticipate over 0.5-0.8 crore loss in urban subscribers, while rural areas gaining by over 0.2-0.5 crore," she added.

Prashant Singhal, EY Emerging Markets Technology, Media & Entertainment, and Telecommunications (TMT) Sector Leader said, " The COVID-19 lockdown derailed mobile subscriber growth, triggering a sequential decline in subscriptions. Between Mar’20 – Jun’20, mobile net-adds declined nearly 1.9 million. This can be attributed to a disruption in prepaid recharges and the customer onboarding process. Also, multiple SIMs witnessed a dip as users at home rationalising their connections."

"In India, over 95% of users are pre-paid subscribers. Cumulatively, 2.2m million recharges are dispensed daily, of which 60% are done offline. With the lockdown in force, retail store closure not just halted mobile recharging, but the entire e-KYC process for new subscriber activation and doorstep delivery of SIM cards was shut down," he added.

Commenting on the recovery, Singhal said, "With the lockdown easing coupled with initiatives by operators to increase ways and reach of digital recharges; mobile subscriber addition is en route a recovery. It is evident with mobile net-adds between Jul-Oct’20. The spike in digital adoption is driving a fundamental shift in demand for mobile broadband. With half of our population offline, growth in mobile broadband will unlock the next phase of growth (and not just recovery) in Indian telecoms. Now with all opening up and accelerated digital adaption, the services are only going to increase.”

Bhupendra Tiwary, Research Analyst, ICICI Direct said, "The fall in mobile subscribers was not only on account of the Covid-19 pandemic. Other factors like sim integration too played into it. Further, the lack of physical recharge outlets, the introduction of minimum value of recharge by operators, and tariff hikes too led to a fall in the subscriber count."

Commenting on the outlook, Tiwary said, " While the recovery is back on track as the Covid-19 impact is absorbed, the subscriber count may still be slightly lower than the FY20 level."