Bharti Airtel, Vodafone Idea to see slower revenue growth in Q1: ICICI

Bharti Airtel and Vodafone Idea (VIL) are likely to see slower revenue growth for Q1FY23 because of fewer 4G subscriber additions due to the lower smartphone sales, a decline in overall user base and negligible benefit of December tariff hikes, a report by ICICI Securities said.

Reliance Jio, however, is expected to add 5 million subscribers during Q1 after reporting a decline for the past three quarters. The telco will also benefit from the hikes because it has a higher proportion of long validity recharge users. “Mobile revenue growth for Bharti is estimated at 1.6% quarter-on-quarter (q-o-q), while VIL’s will grow only 0.6% and RJio’s revenue will be up 3.3%,” ICICI said.

As per the research firm, Q1 FY23E would be a muted quarter for telcos with subscribers declining for Airtel (down 3 million) and VIL (down 4 million). “4G net add for Bharti (+3 mn)/VIL (+1 mn) again will be muted due to lower smartphone sales. However, the average revenue per user (Arpu) will show growth of 2-4% and will be aided by one additional day, some benefit of tariff hike taken in Dec’21 and some premiumisation (though it would be lower vs earlier quarters). RJio will have the highest growth in Arpu, up 4% q-o-q to Rs 174. Bharti’s Arpu will grow by 3.1% to Rs 184, and VIL’s by 2% to Rs 126,” the report said.

Another report by Edelweiss said the telecom operators would report Q1 FY23 revenue growth of 1–5% q-o-q, largely led by Arpu improvement. It further said the subscriber shift from weak to strong operators would continue.

On the 5G spectrum auction, Edelweiss said: “We expect telecom operators to stagger their 5G spectrum purchases due to sufficient spectrum availability and lack of ecosystem. Consequently, the balance sheet commitment could be limited.”

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