The struggling telecommunications sector could breathe a sigh of relief amidst the nationwide lockdown, while the majority of India Inc is struggling with a demand-side problem. Average revenue per user, the parameter used by telcos to map revenue generated from users, is set to see a significant uptick in the March quarter, helped by the tariff hike implemented by all telecom operators in the month of December last year. Along with that the increase in gross subscriber base and data usage will also see a decent jump owing to the nationwide lockdown that was initiated in the month of March, said brokerage and research firm Emkay Global in a research report.
“We expect Bharti Airtel to record healthy performance with 17% sequential growth in wireless revenue, driven by an ARPU increase of 13%. Vodafone Idea should record relatively lower growth in underlying ARPU, while subscriber loss should aid ARPU growth of 12% quarter-on-quarter,” the report said. Data volumes are expected to rise by 13% to 10% for Bharti Airtel and Vodafone Idea, respectively. Data demand is expected to have surged during the days of lockdown in March.
Although Reliance Jio is expected to only register a 5% growth in ARPU to Rs 135, the telecom operator might see a decent subscriber addition while tariff hike is expected to show its actual impact on the company in the first quarter of the current fiscal. “EBITDA should see 15% growth qoq, while PAT increase will be restricted due to higher depreciation and interest charges,” Emkay Global said.
Wireless revenue for Bharti Airtel could jump by 17% owing to the increased tariffs, a 5% growth in data subscribers and 13% jump in data volumes. Data volume surge can be partially attributed to the nation-wide lockdown. On the other hand, Minutes on Network are expected to grow 3% in comparison to the average of 1% in the last three quarters.A 13% jump in ARPU would mean a surge from Rs 135 in the December quarter to Rs 153 in the March quarter. On-quarter basis the profit after tax for Bharti Airtel could jump 83%, however the fall in profits in the previous quarter was due to provision for adjusted gross revenue dues.
Data subscribers of the struggling Vodafone Idea are pegged to grow at 2% in the March quarter, while wireless revenue is expected to jump 9.3%. “ARPU is expected to rise 12% on the back of the tariff hike and total subscriber loss of 8mn. Wireless revenue and EBITDA are projected to rise 9% and 13% qoq respectively,” the report said. ARPU for the March quarter could go up to Rs 122 from Rs 109 recorded in the December quarter.