Contrary to general perception, people did not talk a lot on phones during the lockdown months of April and May and data traffic on the network did not actually witness a huge explosion, if the April-June quarter results of Bharti Airtel and Reliance Jio are anything to go by. One of the reasons could be that total closure led to lower sales of new 4G smartphones, which meant lesser addition of new subscribers. Plus, recharge options were limited.
For instance, in the case of Bharti Airtel, total voice minutes on the network decreased by 0.2% during the quarter compared to the preceding quarter when it had grown by 8.3%. Even voice usage per customer, per month, grew only by 3% quarter-on-quarter compared to 7.5% in the preceding quarter. Total data volume on the network increased by 12.2% quarter-on-quarter, which was slower than 16.3% in the preceding quarter.
Data usage per customer, per month, however, witnessed a higher growth at 11.2% compared to 7.5% in the preceding quarter.
Analysts said the existing subscribers remained within the their data allowance and new subscriber addition slowed due to the lockdown, partly because sales of new smartphones also slowed. In the case of Bharti Airtel, 4G subscriber addition increased by only 2 million during the June quarter compared to average 13.7 million in the preceding three quarters.
Bharti Airtel’s MD and CEO, India and South Asia, Gopal Vittal accepted this in an investor call post-results. “Due to the nationwide lockdown, supply chains were disrupted, leading to a sharp drop in smartphone shipments and, in turn, impacting the pace of upgrade from 2G to 4G. Further, a large part of our offline channel partners were closed, including our own retail stores, restricting people’s ability to recharge conveniently,” Vittal said, adding, “We saw a slowdown in 4G net adds given the supply shock to smartphones.”
Similarly, in the case of Reliance Jio also, gross subscriber additions fell 37% quarter-on-quarter to 15 million, which can again be attributed to Covid-19 related closures. Total voice traffic on network grew by only 1.5% compared to 6% in the preceding quarter. Minutes of voice usage per customer, per month, in fact declined by 2% compared to a growth of 1.4% in the preceding quarter.
In the case of total data traffic on the network, the growth was higher at 10.6% compared to 6.3% in the preceding quarter. Usage per customer, per month, was also higher in Jio’s case with growth at 7% compared to 0.89% in the preceding quarter. This could be because Jio has higher percentage of 4G users who are able to recharge through digital means. Also its net subscriber addition at 11 million was higher than Bharti, which actually saw net subscriber declining by 3.8 million.