Though analysts foresee a better fourth quarter for the financial year 2008-09 (4QFY09) for the telecom sector as compared to 3QFY09, mixed results are anticipated. While subscriber addition would remain robust, average revenue per user (ARPU) and revenue per minute (RPM) will continue to decline. The GSM launch by Reliance Communications (RComm) and the cut in the termination charges are said to be the key developments during the quarter. As per industry insiders, the topline (total sales) of the three telecom majors, Bharti Airtel, RComm and Idea Cellular for the 4QFY09 is estimated at around 28% year-on-year (y-o-y) and 6% quarter-on-quarter (q-o-q).
?We expect market leader, Bharti Airtel, to report a 34.3% (y-o-y) and 9% (q-o-q) increase in net revenues. The same for RComm is estimated to be 15.8% (y-o-y) and 7.2% (q-o-q). Strong growth in net revenues for Idea Cellular is predicted to be around 46.6% (y-o-y) and 5.9% (q-o-q),? said Harit Shah, analyst, Angel Broking. The strong growth in the net revenues for the three operators has been driven mainly due to huge subscriber additions. As per industry estimates, the quarterly net adds for Bharti Airtel is assumed to be at 8.2 million subscribers, totaling it to about 93.8 million subscribers. The same for RComm is anticipated to be at 72.7 million, with quarterly net adds of 11.4 million subscribers. Subscriber base of Idea Cellular is estimated to be around 39.5 million with quarterly net addition of 5.3 million.
Though the telecom sector is expected to stand robust in terms of its growth in 4Q FY08-09, operators have to be cautious about the free minutes of usage given to subscribers which will impact the topline and lower EBITDA margins, said an analyst who did not want to be quoted. During the quarter, we have seen Idea and RComm coming up with aggressive pricing plans. ?Due to global slowdown and reduced travel, we expect roaming revenues to go down and hence negatively impact ARPUs,? he added. On a quarterly basis, net profit of Bharti Airtel is said to grow by 6.7% mainly due to the margin pressure and forex losses. RComm is expected to show a subdued performance with a mere 2.6% increase (q-o-q) in growth on account of margin pressures, higher depreciation charges and taxes. Idea Cellular?s net profit on account of the newer circle launches, forex losses and higher depreciation charges is expected to experience a fall of 19.2% on q-o-q basis.