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New Delhi, October 20
Bharti Airtel is expected to report around two per cent quarter-on-quarter (q-o-q) revenue growth and five-million 4G net additions while Reliance Jio is expected to report four per cent q-o-q revenue growth, and 10 million 4G net additions, said various analysts’ on Thursday in their earnings preview.
Airtel is declaring its second quarter results on October 31 and Reliance Jio on Friday.
“During the second quarter Q2-FY23, we expect 2-4 per cent q-o-q revenue growth for Bharti Airtel and Jio. We expect average revenue per user (ARPUs) to witness a 1-2 per cent q-o-q uptick driven by a higher number of days in the quarter and better subscriber mix,” said Jefferies in its report.
Jefferies report
While subscriber additions for Airtel should remain soft at 2.5 million, Jio should continue to witness healthy subscriber additions, it said.
“We expect a 60-110 bps expansion in margins for Bharti/Jio because of lower spectrum usage charges (SUC) due to the 5G spectrum acquired in August. Focus will be on 5G rollouts/ capex and monetisation plans,” it said. Key focus areas will be commentary around 5G capex and monetisation, margin benefits due to lower SUC and timing of next tariff hikes, it added.
BNP Paribas analysis
Similarly, BNP Paribas said that Airtel’s India mobile revenue to rise around 3 per cent q-o-q benefiting from the increase in 4G subscribers and higher ARPU of ₹187 versus ₹183 in the first quarter, due to the extra day in the quarter. “Airtel’s India non-mobile business, including broadband and enterprise, will continue its strong growth trajectory, with the telco gaining revenue market share across divisions,” it said.
For Jio, it has projected a marginal increase in ARPU to ₹177 (+1 per cent q-o-q), while data volume growth q-o-q should continue to moderate.
ICICI Securities report
Analysts at ICICI Securities said Vodafone Idea (VIL’s) revenue is expected to rise 1.5 per cent q-o-q to ₹10,600 crore, benefitting from premiumsation. It’s net loss is seen at ₹7,200 crore, it said. “Spectrum (for 5G rollout) purchase in July auction is yet to be deployed, and interest cost related to spectrum and 5G rollout cost will be capitalised for all the three telcos. However, EBITDA is expected to benefit from lower SUC,” it added.
Steady quarter likely
Amid 5G network deployments by telcos, market analysts will be keenly tuning in to management commentaries on pace of roll-out of the 5G services, capex outlook and markers on tariff hikes. “We expect Indian telcos to report a steady quarter with stable ARPUs and slowing net adds. Margins would be higher q-o-q as we get 45-50 days benefits of lower SUC,” BofA Securities said in its Q2 earnings preview for the sector.
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