It seems that the private telecom operators in the country including Reliance Jio, Vodafone Idea (Vi), and Bharti Airtel are not expected to see a robust growth in mobile revenues in Q1 FY23.
Why Would This Happen?
This could be affected by a couple of reasons, as mentioned by ICICI Securities in a note.
To start with, Bharti Airtel and Vodafone Idea Limited (VIL) are experiencing a decline in subscribers.
The other factor is the prices of smartphones were up, which has resulted in the lower sales in fewer 4G subscribers net addition.
That is why the benefit of premiumisation of services won’t be there.
According to the ICICI Securities, telcos will see negligible benefit from the tariff hike implemented during December 2021, except for Jio which has many long-term subscribers.
Rise In ARPU
During this quarter, the average revenue per user (ARPU) figure will rise because of the one extra day that was there in the quarter.
Further, the mobile revenue growth for Airtel is expected at 1.6% QoQ as for VIL it is only 0.6% and for Jio it is 3.3%, analysts said.
The report suggests that Reliance Jio will be having the highest growth in ARPU, up by 4% to Rs 174.
For the same period, Airtel’s ARPU is expected to reach Rs 184 with a growth of 3.1%.
Similarly, VIL’s ARPU is expected to rise by 2% to Rs 126.
During this quarter, 4G net additions for Airtel were three million while for VIL was one million.
In the case of Airtel India, its revenues are expected to grow by 1.6% QoQ (21.6% YoY) to Rs 231 billion led by the mobile segment which is up by 1.6% QoQ and 25.1% YoY.
It is expected that India EBITDA (earnings before interest tax depreciation and amortisation), as well as Africa EBITDA will rise.
But, the consolidated EBITDA is expected to dip by 1% QoQ (+22.4% YoY).
All in all, the net profit for Airtel is seen at Rs 19 billion.
For the Jio Platform, the EBITDA is expected to rise 3.3% QoQ to Rs 113 billion and net profit to rise 6.4% QoQ to Rs 46 billion, according to the ICICI Securities.
When it comes to VIL, the EBITDA is expected to dip 3.4% QoQ to Rs 45 billion and the net loss is seen at Rs 66 billion (there are no tax rebates).