Telcos may record unchanged revenues in Jan-Mar; expectations increases for VI fundraise
Leading telecom infrastructure operator Indus Towers is anticipated to release comparatively stronger financial results, most likely helped by Vodafone Idea’s partial payment of its outstanding debt.
Advertisement
The first half of the current fiscal year will see Indian telecom providers Reliance Jio, Bharti Airtel, and Vodafone Idea perform better thanks to anticipated pricing hikes. However, they are projected to report essentially stable revenues for the quarter that ended on March 31.
Leading telecom infrastructure operator Indus Towers is anticipated to release comparatively stronger financial results, most likely helped by Vodafone Idea’s partial payment of its outstanding debt.
The sector is expected to see gains in the next two quarters, according to analysts and brokerages following the business. These include tariff hikes of up to 20% following the conclusion of the general elections in June.
“We expect a stable set of numbers from India telcos, with 0-3% qoq (quarter-on-quarter) improvement in cellular revenues and largely flattish EBITDA margins,” stated analysts at BofA Securities.
Reliance Jio is anticipated to maintain its current momentum in terms of net additions, with 11.5 million more users than in the quarter that concluded in December 2023.
Analysts forecast flat ARPUs and Ebitda margins, a 2-million subscriber loss, a 1.6% revenue decline for Vodafone Idea’s FPO launch, and a 6% sequential revenue rise for Indus.
“Tariff hikes are likely to happen in the next few months post elections, we see possibility of 15-20%,” BofA Securities added. In December 2019, carriers increased headline pricing by 20% to 40% for the first time since Jio launched its services in 2016 and offered voice as a free service. In December 2021, there was another hike—this time by 20%.
“We expect the industry to take 15%–17% tariff hike post the elections. The previous hikes have provided an ARPU uplift of ₹30 and ₹36 over four quarters,” analysts working at Antique Stock Broking mentioned in a note.
“It’s rather an attempt by the operators to improve ARPU that will in return help recover the investments made on 5G,” added Faizal Kawoosa, founder at TechArc. “The investment burden has got shouldered on the operators. They now have every right to take a pause and emphasize on recovering the investments and make profits,” he wrapped up.
Advertisement