This will be the first full quarter since India’s Telecom companies boosted their pricing.
Users of the brands were concerned about the price increase as subscribers are beginning to feel the effects of rising telecom costs. The telecom providers are expected to post robust results for the three months ending in March, the first full quarter following rate increases in November and December.
On a sequential basis, Bharti Airtel, Vodafone Idea, and Reliance Industries’ Jio Platforms are likely to improve their average revenue per user (ARPU) by 7-9 percent.
In the quarter ending December, Bharti Airtel’s ARPU was Rs 163, while Jio’s ARPU was Rs 151.6 and Vodafone’s was Rs 115. JP Morgan India expects the three telecom firms to generate 5-7 percent sequential revenue growth after the full advantages of the pricing rise are realized.
Analysts anticipate a solid quarter for telecom businesses in 4QFY22, with revenue and EBITDA growth of 6-11 percent QoQ owing to the impact of the industry’s 20 percent rate rise in November 2021.
Vodafone Idea is expected to announce strong operating profit growth, boosted by rate rises. Despite losing subscribers, IIFL Securities anticipates the business to record a 17 percent increase in operational profit quarter over quarter.
Investors will be interested in management commentary on subscriber bases, prospective rate rises this year, capital expenditure plans, the 5G spectrum auction, and margins, given the higher fuel costs for operating telecom towers in the June quarter.
Given the entry-level prepaid pricing rise in July 2021, followed by another significant hike in November 2021, the industry is seeing outsized churn in the lower ARPU categories. As a result, it’s expected that slow subscriber growth and restricted upgrades to high APRU plans will persist.
Analysts predict that the majority of customer churn will occur in the March quarter. Bharti Airtel, which had 356 million customers in India at the end of the third quarter, is expected to maintain its lead in both ARPU and subscriber additions.
Bharti Airtel is expected to add over 1 million new subscribers in the quarter, compared to Reliance Jio’s unchanged subscriber base and Vodafone Idea’s 4 million user loss.
Reliance Jio is predicted to see a 6 percent revenue increase quarter over quarter, supported by a 9 percent increase in ARPU. As part of the continuing consolidation of low-income consumers, Jio is anticipated to lose 2 million members. In the third quarter, Jio has 421 million users.
