Exactly a year ago, we wrote ‘Andra tutto bene’ (everything is going to be alright!) in which we analysed the likely changes to consumption, industry structures, etc. We revisit the thoughts, we are looking beyond the noise, and present potential changes in operating environment and likely beneficiaries – ‘Va tutto bene’ (everything’s fine!). A root-cause-analysis of every trend indicates that it is a consumer/customer behaviour change.
Top long-term trends in telecom. The sector has been the key enabler of work- from-home culture and keeping people connected in an otherwise travel-restricted world. We have seen certain trends emerging in FY21 that are likely to continue in FY22, too, rising adoption of mobile broadband and fixed broadband services; productivity and utility enhancement on the back of data; emergence of telcos in pushing a digital entertainment ecosystem; rise in virtual meetings; and thrust to enterprise solutions. Beneficiaries. Bharti Airtel, Vodafone Idea, Reliance Jio and Tata Communications
Rising adoption of mobile broadband and fixed broadband: In January’21, mobile broadband penetration in India stood at 63.3%, up 680bps from 56.5% in January’20, despite 30-40% tariff hike. We suppose the rise of a digital ecosystem is increasing consumer awareness of the importance of mobile broadband connection. This is further evidenced from the multifold growth in mobile-led payment transactions in past one year. We believe strong growth in mobile broadband (4G) would continue through the next few years. Fixed broadband (FBB) is playing a critical role in enabling the WFH culture and online classes. FBB has seen strong adoption with 19% growth in subs in past one year (it was flattish for several years). This was further helped by aggressive pricing by both Reliance Jio and Bharti Airtel.