The telecom sector's mobile subscriber net additions moderated to about 2.2 million (22 lakh) in April this year, with analysts blaming the 'muted' numbers on the second wave of COVID and lockdowns.
After a strong fourth quarter of 2020-21, where the industry added 27.2 million subscribers, April was a "weak month" with only 2.2 million net additions, UBS said in its report on Tuesday.
"We attribute this to the beginning of the second wave of COVID," a UBS note said.
As per data released by Telecom Regulatory Authority of India (TRAI), Bharti Airtel added only 0.5 million (5 lakh) subscribers in April, against 4.8 million net additions by larger rival Reliance Jio.
Troubled Vodafone Idea Ltd (VIL) shed 1.8 million subscribers in April after showing some improving momentum in February and March.
While Jefferies' report observed that the sector's reported subscriber additions had "moderated" to 2 million due to lockdowns, a note by ICICI Securities said user addition had slowed on account of COVID second wave and lockdown.
"Jio led the field with 4.8 million net adds due to JioPhone offer. Bharti's subscriber additions moderated to 0.5 million due to 4.5 million urban subscriber decline," Jefferies' report said.
It added that although VIL had lost 1.8 million subscribers, "its urban net adds were the highest at 3.4 million".
"Its high rural subscriber share will be targeted by Bharti and Jio for market share gains which should keep tariff hikes at bay," the Jefferies' note pointed out.
Jio was the only telco to see net additions in both urban and rural markets as well as metros/A/B and C circles.
Jio's market share in rural areas at 34 per cent has scope to rise given that its market share in urban areas is higher at 38 per cent, Jefferies noted.
Pointing to the latest subscriber trends emerging from TRAI data, Emkay, in its report, said, "Second wave-led cracks start to appear".
"Partially impacted by the second wave of COVID, April was a muted month with net subscriber additions restricted at 2.2 million versus an average of 5.4 million in the last six months," the report said.
VIL subscriber base contracted by 1.8 million "equivalent to the gains made in February and March 21".
"With more stringent lockdowns across states in May, our Q1 projections are on the conservative side, with Jio expected to add 5 million subscribers and Bharti's base remaining stable," it forecast.