• Rajasthan

    Cong 99
    BJP 73
    RLM 3
    OTH 24
  • Madhya Pradesh

    Cong 112
    BJP 108
    BSP 2
    OTH 5
  • Chhattisgarh

    Cong 67
    BJP 15
    JCC 7
    OTH 0
  • Telangana

    TRS-AIMIM 95
    TDP-Cong 21
    BJP 1
    OTH 2
  • Mizoram

    MNF 26
    Cong 5
    BJP 1
    OTH 8

* Total Tally Reflects Leads + Wins

Reliance Jio effect: Pressure continues, telcos to report subdued Q4 numbers

By: | Published: April 15, 2018 12:35 PM

The battered telecom sector companies will be reporting another set of subdued numbers for the January-March quarter, with revenues likely to show a correction of as much as 40 per cent.

Reliance Jio, reliance jio quarterly results, telcos, telecom company, Reliance Q4 numbers, reliance communicationThe battered telecom sector companies will be reporting another set of subdued numbers for the January-March quarter, with revenues likely to show a correction of as much as 40 per cent.

The battered telecom sector companies will be reporting another set of subdued numbers for the January-March quarter, with revenues likely to show a correction of as much as 40 per cent, analysts have said. “The competitive intensity in telecom industry further intensified since January 2018 after the new entrant started passing on the benefits of cut in interconnect usage charges to customers through lower tariffs,” largest ratings agency Crisil said in a report. It said the revenue is expected to fall by up to 40 per cent due to “heightened competitive intensity”, and added that factors like pullout of Reliance Communication from 2G services and efforts by the incumbents to retain high data users will be impacting revenue growth.

Domestic brokerage Motilal Oswal said there is a “lack of earnings visibility” in the sector and estimated that the largest telco Airtel will report a 80 per cent decline in profits, while third largest operator Idea Cellular’s losses will continue to be elevated. Its peer Emkay Global Financial Services estimated a 10.1 per cent decline in sales for the telecom sector on a year-on-year basis during the March quarter, while the pretax margins will contract by 2.40 per cent. Kotak Securities said the March quarter performance will mark a weak end to what has been a challenging year.

“Jio’s pricing moves in the month of January 2018, impact of international termination rate (ITR) cut effective February 1, 2018, and continued ARPU downtrading are likely to reflect in another quarter of sharp sequential revenue decline for the incumbents,” it said. It can be noted that the aggressive play by the cash rich Reliance Jio in the segment has led to massive pain among the incumbents, and led to a slew of corporate actions including exists and almost forced mergers and acquisitions. Idea and Vodafone, the third and the second largest operators, respectively, are in the final stage of getting regulatory go-aheads to merge, while others like RCom have virtually retreated.

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