The overall revenue growth for mobile services in Q3 FY22 will be steady as the 20% tariff hikes in the last leg of the quarter would have a limited impact, says ICICI Securities. The analyst has, however, earmarked the last quarter of the year to be a very important one for the telcos as the maximum benefits of the tariff hikes will be seen and would pave the ground for the telcos to get the largest revenue market share in the long-term. The average revenue per user (ARPU) growth will also be nominal for the telcos, with Bharti Airtel expected to have the highest ARPU in the industry.
Vodafone Idea to be the Only Private Telco to Lose Money
ICICI Securities has said that both Jio and Airtel are expected to end up with net profits for the last quarter except for Vodafone Idea, which is expected to report a net loss of Rs 71 billion. Further, Vodafone Idea and Bharti Airtel are expected to see a decline in subscribers due to multiple reasons, including a steep increase in the price of 2G tariffs as well as all the other plans seeing approximately 20% tariff hike.
A report from ICICI Direct Research suggests that Jio, Airtel, and Vodafone Idea (Vi) will see a 6%, 4%, and 6% growth in the ARPU which will translate to Rs 149, Rs 163, and Rs 116. The real ARPU gains from the tariff hikes will be seen during the last quarter of FY22.
Vodafone Idea still has a long way to go with increasing ARPU as even after offering way more expensive plans than Jio; its ARPU is very less. Vi requires more 4G data users in its subscriber base and needs them to recharge with higher tariffs and also needs to soon start adding new customers.
ICICI Securities has put a ‘Buy’ rating on Bharti Airtel while haven’t rated the other two private telcos yet.