The effect of COVID-19 was seen in every sector of the economy. One of the already struggling sectors, the telecom sector saw many losses and hardships during the lockdown period. Reliance Jio was the only telecom company which saw profits during the time because of all the investments which came in. One of the many side-effects witnessed was low migration rate and new user addition to the 4G. In the first quarter of 2020, an all-time low user addition and migration rate to 4G was recorded. Even though it is a bad result for the sector, it is not surprising and the sector is going to recover very soon.
Lowest Migration Rate to 4G Recorded
There are many reasons behind this unfortunate record. One of them was the lockdown and the shutting down of retail stores. A large number of customers go to purchase their SIM cards from local retail stores and since they were shut, there was no way people could port to 4G SIM cards.
According to a report from ET Telecom, the 4G user base grew by a very small 1.7% in the first quarter of 2020 against 5.3% in the quarter before that. However, the analysts are quite sure about the fact that the telecom industry will recover very soon since it was just temporary retail shut down in the country.
As for the current quarter, the number is expected to rise to 4% and when the festive season arrives the numbers might further rise to 5% since sales for smartphones increase during that time. Along with that, now the telecom companies are delivering the SIM cards to the homes of their customers. This will further add to the convenience of the customers and they will be more motivated to port to a 4G network or SIM card.
One of the other reasons which have been prominent in the slow migration rate is the resilience of 2G and 3G customers of the country to the 4G network. There are around 317 million customers in India which use 2G/3G network.