India Ratings and Research (Ind-Ra) in its latest report has said that fundamentals of India’s telecom sector improved during Q4 (January-March) of 2019-20, on the back of price hikes in December, ability among telcos to reduce the churn of customers and more subscribers opting for 4G. It believed that the lockdown due to coronavirus pandemic has provided another strong fillip to the ongoing trend of 2G and 3G customers for telcos transitioning to 4G, driven by the needs of higher data download speed and limits.
It can be noted that the aggressive play by Reliance Jio since its 2016 entry into the market has left a deep impact on the telecom sector resulting in heavy losses being reported by companies and some market exits. Overall, it said operational trends continued to improve for the telecom sector in Q4 FY20 with Average Revenue Per User (ARPUs) for Bharti, Vodafone-Idea and Reliance Jio rising 14 percent, 11 percent and 2 percent, respectively, quarter on quarter. It also stated that the rise in ARPU was driven by a 20 percent tariff hike undertaken by the telcos in December 2019 and continued transition of customers from 2G/3G to 4G.
According to the report, Reliance Jio continued to gain in the subscriber market share even in Q4 FY20 but the pace of market share acquisition has slowed markedly in recent quarters amid declining competitive intensity in the sector. About future trends, it said internet traffic has seen an 11 percent increase in April, which will augur well on the data usage front for the telcos. It added that the jump in data usage was due to a higher activity on aspects like movies and gaming during the COVID-19 related lockdowns.
MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.
To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.
MoneyWorks4Me ensures this through: