The private telecom operators in India including Reliance Jio, Vodafone Idea (Vi), and Bharti Airtel aren’t going to see robust growth in mobile revenues in Q1 FY23. This is due to a couple of reasons, said ICICI Securities in a note.
First of all, Bharti Airtel and Vodafone Idea Limited (VIL) saw a decline in subscribers. The smartphone prices were up and thus the sales were lower resulting in fewer 4G subscribers net addition. Therefore, the benefit of premiumisation of services won’t be there.
ICICI Securities said that telcos will see negligible benefit from the tariff hike implemented during December 2021, except for Jio which has many long-term subscribers.
ARPU to Rise Because of One Extra Day in the Quarter
The average revenue per user (ARPU) figure will rise because of the one extra day that was there in the quarter. As per the analyst, 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%.
According to the report, Reliance Jio will report the highest growth in ARPU, up by 4% to Rs 174. Airtel’s ARPU is expected to reach Rs 184 with a growth of 3.1% and VIL’s ARPU is expected to rise by 2% to Rs 126.
4G net additions for Airtel were three million while for VIL was one million during the quarter. Airtel India’s 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. India EBITDA (earnings before interest tax depreciation and amortisation), as well as Africa EBITDA, is expected to rise but the consolidated EBITDA to dip by 1% QoQ (+22.4% YoY). Net profit for Airtel is seen at Rs 19 billion.
ICICI Securities said that Jio Platform’s EBITDA is expected to rise 3.3% QoQ to Rs 113 billion and net profit to rise 6.4% QoQ to Rs 46 billion.
As for 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).