Vodafone Idea Lags Behind Airtel, Reliance Jio in Sequential Income Growth: Analysts

Jio is playing to be

By May 15th, 2019 AT 9:04 AM
Highlights
  • Vodafone Idea reported an increased ARPU of Rs 104 during March quarter
  • The company's ARPU increased due to the introduction of minimum recharge plans

India’s largest telecom firm Vodafone Idea, in spite of reducing its losses, lagged behind its peers in sequential income growth with flat revenue in the March quarter against 4.3% growth of Airtel’s India mobile business and 7% growth of Jio, analysts have noted. “…with Bharti reporting 4.3% quarter-on-quarter increase in its India mobile revenues, flat revenues for Vodafone Idea indicates it continues to lose market share…while Vodafone Idea continues to cut costs and realise benefits from opex synergies, it also continues to lose revenue market share Vs Bharti as well as Jio,” Credit Suisse said in its latest report.

Jio is playing to be “India two player”, Ambit Capital said adding that this severely impacts the ability of Vodafone Idea to enjoy the upsides of its rural subscriber base upgrading to smartphones.

“Revenue was….lower than peers Bharti (4.3% QoQ) and Jio (7% QoQ). However, ARPU (Rs 104) rose 17% quarter on quarter driven by the impact of minimum ARPU plans,” Deutsche Bank Research said in its report.

Vodafone Idea, which recently concluded Rs 25,000 crore rights issue, is looking to monetise investments in tower venture as well as fibre assets, Deutsche Bank said adding that it believed the transactions would provide it adequate liquidity to maintain capex programme and fund spectrum payments.

On Monday, Vodafone Idea posted a consolidated loss of Rs 4,881.9 crore for the fourth quarter ended March 31, 2019, amid a brutal tariff war in India’s mobile market.

The loss narrowed from Rs 5,004.6 crore during the third quarter of 2018-19. For Vodafone Idea — whose financials have been battered by intense price competition posed by the richest Indian Mukesh Ambani’s Reliance Jio — the revenue from operations for March quarter of 2018-19 came in at Rs 11,775 crore, nearly flat compared to Rs 11,764.8 crore logged in the previous December quarter.

READ:  Vodafone Rewards Programme Introduced to Offer Extra Data, Calling Benefits on Prepaid Recharges

Bharti Airtel’s India mobile services revenue stood at Rs 10,632.3 crore in the just-concluded quarter, up from Rs 10,189.2 crore in December 2018 quarter. For Reliance Jio, the operating revenue came in at Rs 11,106 crore, a sequential increase of 7% from Rs 10,383 crore in the preceding quarter.

In its note post-Vodafone Idea earnings announcement, Jefferies said it expects “market repair” only in FY21 and Vodafone Idea will need further funding in FY21 to complete its capex plans.

“We believe that price hikes are unlikely in FY20 and can happen only once Jio becomes a dominant player with 40% plus market share, which we expect in FY21. We expect VodaIdea market share to fall to 20% and Bharti to remain steady at 30% by FY22,” Jefferies pointed out.

CLSA pointed out that while the introduction of minimum recharge plans — which require customers to make a minimum recharge of Rs 35 — did not drive up Vodafone Idea’s revenues materially, it did knock off 53 million subscribers (14% of base) and push up Average Revenue Per User by 17% sequentially.

Read more on:

Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

2
Leave a Reply

avatar
Photo and Image Files
 
 
 
2 Comment threads
0 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
1 Comment authors
ANUPAM MUKHERJEE Recent comment authors
newest oldest most voted
ANUPAM MUKHERJEE
ANUPAM MUKHERJEE

I took some interest in redmi y3 which was supposed to be released today, what about that?

ANUPAM MUKHERJEE
ANUPAM MUKHERJEE

what about redmi y3?

City
KOLKATA
Operator
07980656553

Recent Posts

Vodafone Rs 20 Prepaid Talk Time Plan Reintroduced With 28 Days Service Validity Extension

Vodafone has reintroduced its Rs 20 talk time plan for prepaid users in select circles. This time around, the plan...

Motorola One Action First Impressions: A Smartphone Packing an Action Camera

Motorola has been betting on its new One series of smartphones which encompass new innovations. We have already seen the...

JioFiber Witnessed 120.1% Increase in Download Speeds Over Fixed Broadband During Last 12 Months: Ookla

Broadband speed measurement firm Ookla on Thursday said it has found Bharti Airtel to be the fastest mobile broadband network,...