J&K lockdown hits telecom companies' revenue for second quarter: TRAI data

Wireless subscription data released by TRAI shows that the region also recorded a sharp dive in its overall mobile subscriber base during August and September, shedding a net 2.58 lakh users.
Traffic ply on roads at Lal Chowk during shutdown in Srinagar Thursday Nov. 21 2019. (Photo | PTI)
Traffic ply on roads at Lal Chowk during shutdown in Srinagar Thursday Nov. 21 2019. (Photo | PTI)

NEW DELHI: The communications lockdown in Kashmir has had a substantial negative impact on the subscriber base and revenue generation of telecom companies.

Instituted a day before the abrogation of Article 370 on August 5, the telecom service blockade has seen the percentage of active subscribers in the region fall from over 85 per cent in June to a paltry 42.51 per cent in September.

Wireless subscription data released by TRAI shows that the region also recorded a sharp dive in its overall mobile subscriber base during August and September, shedding a net 2.58 lakh users.

The contraction in mobile user base during the last two months of the second quarter (Q2FY20) saw the region record a net decline of 1.15 lakh wireless subscribers during the period, compared to a net addition of 1.44 lakh mobile connections during the first quarter ended June 30, 2019.

The decline is even more prominent when seen in terms of active wireless subscribers (measured through the Visitor Location Register or VLR), with data showing that over 65 lakh wireless connections weren’t active in the state during September, compared to just 17.2 lakh in June.

The sharp fall in active subscribers from the region during the course of the communications lockdown played a part in depressing the revenue growth of major telcos, say industry executives.

Speaking to analysts during an earnings call, Bharti Airtel’s chief financial officer Badal Bagri noted that while the company’s mobile services revenues continued to grow during the quarter (1.1 per cent), this was noteworthy because it came “despite the shutdown in Jammu and Kashmir”.

“We lost a number of customers, running into almost 2.5 million to 3 million (25-30 lakh), in Jammu and Kashmir,” added Gopal Vittal, the company’s MD and CEO for India and South Asia in the same earnings call. Bharti Airtel’s active user ratio has gone from 93.55 per cent in June to just 45.87 per cent in September.

This number has shown a similar trend for other telecom majors. The VLR percentage fell from 72.46 per cent to 42.43 per cent for Vodafone Idea, from 84.02 per cent to 38.44 per cent for Reliance Jio, and from 68.58 per cent to 42.43 per cent for BSNL.

However, with the government having begun slowly lifting the blockade in phases, telcos hope that the subscribers turned inactive by the clampdown would return to the fold once the restrictions on mobile services are fully removed.

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