Telecom operators are expected to report a stable set of numbers in the second quarter (Q2), similar to the first quarter (Q1), and despite no tariff hike, Bharti Airtel (Airtel) and Reliance Jio (Jio) are expected to report healthy growth, said analysts.
“We expect India telcos to report a stable set of numbers in Q2. Similar to Q1, this quarter also has one extra day. Also, roaming revenues are expected to decline (vs holiday season in Q1). Between Airtel and Jio, we expect RIL’s cellular revenue growth to be stronger at 4.3 per cent quarter-n-quarter (QoQ) vs 3.6 per cent for Airtel mainly led by better net adds at Jio,” said Bofa Securities.
Vodafone-Idea (VIL) would likely benefit from an entry-level tariff hike in this quarter and Indus net adds remain strong, it said.
“For Jio, we expect steady momentum across all divisions. Going ahead, fixed wireless access (FWA) would likely be the focus area for Jio and Airtel. Given moderating customer premises equipment (CPE) costs for FWA, the economics are getting aligned for telcos to address the huge market opportunity,” it added.
Similarly, JM Financials said that average revenue per user (ARPU) for Airtel is expected to increase 1.9 per cent QoQ to ₹204 (vs ₹200 in 1QFY24) driven by one more day during the quarter and strong mobile broadband upgrades.
For Jio, too, ARPU is likely to rise by 1.1 per cent QoQ to ₹183 in 2QFY24 (vs Rs.181 in 1QFY24) driven by one more day during the quarter and feature phone subscriber upgradation to smartphones. Further, strong traction in FTTH additions will likely continue withan addition of around 0.75 million.
“Hence, we expect 3.2 per cent QoQ growth in Jio’s standalone revenue to ₹24,900 crore, with EBITDA likely to grow 3.1 per cent QoQ to ₹13,100 crore,” it said.
On VIL, it said the subscriber loss trend is expected to continue, with net subscribers declining by around 4.5 million in the second quarter (had been witnessing the decline of 3-6 million per quarter since the last few quarters) due to migration of subscribers to other telcos.
“However, we expect around one-million addition to MBB subscriber base (TRAI’s July subscriber data showed around 0.6 million decline in MBB subscribers). We expect ARPU to rise 2 per cent QoQ to Rs.142 in 2QFY24 (vs ₹139 in 1QFY24) driven by one more day during the quarter and improving subscriber mix,” the report by JM Financials said.