The lockdown has primarily stung at least half of India’s over 370 million feature phone user base, largely comprising migrant workers who haven’t been able to recharge their phones. The basic phone user base also includes some 85-90 million Jio 4G VoLTE phone users, according to market trackers.
Well over 90% of the 1.15 billion mobile phone subscribers in India are pre-paid subscribers who need to recharge their subscriptions periodically for continuous connectivity. Aimed at helping those migrant workers who haven’t or won’t be able to recharge during the 21-day lockdown till April 14, telcos such as Airtel and Vodafone Idea have extended the validity of plans till April 17.
Industry executives and experts said physical recharges are almost down to nil as people aren’t being able to visit mobile stores or their nearest kiranas to recharge, a development which sharply lowered monthly user additions of telcos. And pure digital recharges, reckoned to make up a shade over a third of overall mobile recharges, are also down.
A senior industry executive estimates that the inability of about 50% of India’s feature phone users to recharge could lead to “around a ₹15 crore revenue loss for the Big 3 telcos during the current lockdown period as these migrant workers recharge small amounts”.
Analysts, though, don’t expect the sharp fall in mobile recharges to sting Bharti Airtel, Reliance Jio and Vodafone Idea’s revenues in the fourth quarter of FY20 as the lockdown started in the fourth week of March. They also expect the combination of higher data usage and the December 2019 tariff hikes to offset any revenue dip in the March quarter. But that, they said, would change if the lockdown is extended.
“If the lockdown continues beyond April 14, it will hit revenues of Airtel, VIL and Jio (sequentially) in the June quarter, though we don’t have estimates immediately,” Rajiv Sharma, research head at SBICap Securities told ET.
