The impact of the recent tariff hikes will continue to boost average revenue per user (Arpu) of telecom operators – Reliance Jio, Bharti Airtel and Vodafone Idea – in the October-December quarter.
Analysts expect the Arpu of the operators to increase 3-5% quarter-on-quarter (q-o-q) during the period. With an increase in Arpu, the revenue for the three telecom operators is expected to increase by 4.3% q-o-q on an average, led by Bharti Airtel.
“Telecom operators took tariff hikes in July, which boosted Q2FY25 ARPU; the residual benefit should show in Q3FY25 as well, but with lower intensity,” said brokerage house ICICI Securities in a note.
The brokerage expects Airtel to report a 9% sequential increase in consolidated revenue to Rs 37,899 crore. Jio and Vodafone Idea revenue is expected to grow at 3% and 1% q-o-q, respectively.
Jio has a higher mix of subscribers with long validity and the tariff hike benefit is staggered over three quarters compared to two quarters for Bharti, analysts said.
According to ICICI Securities, subscriber base that dipped in the preceding quarter on SIM consolidation, may resume growing from Q3.
In the July-September quarter, Airtel’s subscriber base fell to 352 million from 355 million in the preceding quarter. Vodafone Idea’s base fell to 205 million from 210 million and Jio’s base fell to 479 million from 490 million.
According to analysts at JM Financial, Bharti Airtel’s subscriber net additions are estimated at 5 million and 3 million for Jio while VIL’s users may dip 4 million.
JM Financial also expects strong growth in revenue of telecom operators owing to tariff hikes.
“Arpu growth for all players will be aided by the ongoing upgrades to smartphone/post-paid plans. Hence, we expect Jio’s Arpu to improve 4.5% q-o-q to Rs 204 but register net subscriber loss of 1.5 million, driving its revenue and Ebitda growth by 3.1% and 4.9% q-o-q respectively,” said JM Financial in a note.
According to the brokerage, Bharti Airtel is expected to register 4.8% q-o-q and 5.8% q-o-q growth in its India wireless revenue and Ebitda on back of 4.7% q-o-q growth in Arpu to Rs 244. The same is expected to be led by residual pass-through of July tariff hike & robust mobile broadband subscriber gains.
Analysts expect Vodafone Idea’s Arpu to rise 3% q-o-q to Rs 161.
The revenues will be led by growth in data volume. Industry wide growth is expected to be 1.5% q-o-q and 18% y-o-y to 71.3 trillion MB. Industry wide voice minutes are expected to rise 1% q-o-q (2.9% y-o-y) to 3 trillion minutes, according to ICICI Securities.
