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The revenue growth of telecom companies is expected to moderate in Q1 FY23, due to limited residual impact of the December tariff hike and muted subscriber additions. As per analysts, among the three private mobile companies, Reliance Jio is likely to see around 3-3.5% revenue growth, followed by 2-2.5% for Bharti Airtel and around 1% for Vodafone Idea (VIL).
According to analysts, the industry continues to see outsized churn in the lower average revenue per user (Arpu) segments, while upgrades to high-Arpu plans are likely to be limited at around 8-9 million, due to limited availability and higher smartphone prices in the wake of the semiconductor chip shortages.
Further, the quarter will also see an impact from higher inflation and oil prices on telcos’ numbers. “We expect Reliance Jio to show a better quarter on the back of its subscriber momentum bouncing back — we estimate 7.5 million net adds by Jio, far better than Bharti and VIL,” BofA Securities said.
A JM Financial report said it expects around 1 million subscriber additions for Bharti Airtel, while VIL is likely to continue with subscriber losses. Jio’s Arpu is likely to rise to Rs 174 while Bharti Airtel’s will be around Rs 186, and that of VIL around `130.
“In the near term, we expect focus to be on the 5G auction, and with no expected tariff hikes for the next six months at least, we see limited positive catalysts for the Indian telcos,” BofA Securities said.
Another report by Edelweiss said telecom operators would report Q1 FY23 revenue growth of 1-5% quarter on quarter (q-o-q), largely led by Arpu improvement. It further said the subscriber shift from weak to strong operators would continue.
On the 5G spectrum auction, Edelweiss said, “We expect telecom operators to stagger their 5G spectrum purchases due to sufficient spectrum availability and lack of ecosystem. Consequently, the balance sheet commitment could be limited.”
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