Led by a lower decline in the average revenue per user (Arpu) and lower access deficit charges from April 1, telecom companies are expected to post a good revenue growth in April-June quarter. Analysts are of the view that strong mobile net addition will drive healthy revenue growth for Bharti Airtel and Reliance Communications, whereas VSNL and MTNL will benefit from a shift towards value added services (VAS).
Though subscriber momentum has been strong in the past three months for Bharti Airtel, RComm and Idea, UBS Investment Research puts more emphasis on revenues, Ebitda and capital productivity trends. ?Though Q1 tends to be seasonally weak, we expect mobile operators to report solid results in the quarter,? it says.
According to brokerage firm CLSA, mobile net additions have been robust, in particular for RComm, whose Q4 numbers in 2007 numbers were impacted by disconnections. It expects Bharti and RComm to register revenue growth of over 9% and 6%, respectively, over the previous quarter.
?In case of MTNL, while core fixed line business remains under pressure revenue growth will be aided by up-tick in VAS.?
UBS forecasts RComm?s revenue and Ebidta to grow 8% in the quarter, net income to decline 14%, and Ebitda margin to stay flat at 41.5%. For Idea, it expects revenue growth of 9%, Ebitda growth of 6%, and a 31% decline in net income. Bharti is likely to post a revenue growth of 10%, Ebitda growth of 12% and net income growth of 4%, it says.