Rural India’s internet usage drastically increased amid COVID-19 lockdown, surpassing urban areas

Rural India surpassed urban areas in mobile data usage amid the COVID-19 lockdown which caused a shift in consumption pattern as migrant workers returned to their villages and used their data allowances, senior industry executives, an analyst said.

The rural areas mobile data consumption increased 30% sequentially in the April-September period as 60-70% of the migrants returned to the working cities after the lockdown was lifted and eased in the second quarter, contributing strongly to overall data usage levels. Overall rural wireless broadband availability has widened too. As a result, rural consumption now accounts for roughly 45% of overall mobile data usage, and urban usage makes up 55%, compared with a 40:60 ratio before the COVID-19 outbreak.

A combination of a growing rural user base and greater wireless internet availability along with low-cost data have supported the increasing data usage levels in rural India. This was encouraged by the country’s top two telecoms – Reliance Jio and Bharti Airtel by expanding their rural mobile user bases in recent months.

“Post-lockdowns, rural mobile data usage for the 3 big telecoms grew by 30-35% sequentially in the June quarter, which was much sharper than the estimated 15-20% rise in urban data usage,” a top telecom executive said. He added that the data usage pattern was similar in the July-September quarter.

In contrast, rural voice minutes usage fell 5% sequentially in the June quarter as the volume of urban-to-rural voice calls dropped as migrant workers went home, according to estimates by Rajiv Sharma, research head at SBI Cap Securities.

The latest data put out by the telecom regulator shows Jio and Airtel added 2.76 million and 1.47 million rural mobile users, respectively, between June and August, and a clear majority are reckoned to have gone 4G. Vodafone Idea (Vi), despite losing customers, retains a sizeable rural mobile user base that makes up about 54% of its total customer base.

“Growth in rural mobile data consumption is reflected in the 400 basis points (bps) jump in rural wireless internet penetration to 33% between end-December 2019 and end-June 2020,” said Isha Chowdhary, director and telecoms expert at Crisil.

Robust rural data usage boosted overall data consumption, which recorded the highest-ever growth of over 41% on year in the June quarter to 25,369 billion MB, said ICICI Securities. It added that overall data usage grew 11% against low single-digit growth in the preceding quarters.

Crisil estimated overall data usage growth will continue at 30-40% throughout FY21.