Broadband business seen bolstering Q4 revenues for Airtel and Reliance Jio
Reliance Jio and Bharti Airtel, India's top two telecom operators, are set to report modest sequential growth in their fiscal fourth-quarter India mobile revenue, supported mainly by strong broadband user additions in the absence of tariff hikes, analysts said.
Vodafone Idea (Vi) is likely to report a sequential dip in its March-quarter revenue, stung by continued heavy customer losses.
Jio and Airtel, though, are likely to report flattish operating margins, weighed down by higher 5G-related costs, the analysts said.
But experts expect Airtel to turn in a better average revenue per user (ARPU) than Jio, helped by strong 2G-to-4G conversions, rising postpaid user penetration and strong data usage. The one less calendar day in the fourth quarter could play spoiler for Jio on the ARPU front, they said.
However, overall Jio is slated to add more customers than Airtel amid continued market adoption of its affordable internet-enabled feature phone, Jio Bharat.
«We expect the overall telecom sector to see a moderate revenue growth of 2.1% QoQ (quarter-on-quarter), driven by both an increase in subscribers and mix led ARPU improvements,» Motilal Oswal said in research note. «But the absence of tariff hikes, slow market share shift from Vi, and the gradual 5G ramp-up have not significantly contributed to revenue growth, and may potentially lead to a moderation in revenue growth over the next few quarters, in contrast to the 4-5% sequential growth witnessed in the last few years.»
According to BofA Securities, Bharti's
