Telecom firms are likely to post decent growth in key parameters especially average revenue per minute and average revenue per user in the June quarter on account of price hikes.
Rumit Dugar and Udit Garg of Religare Institutional Research said in a note on Tuesday, “Despite weak Q1 subscriber additions, we expect Indian telcos to deliver a 3-4.5% quarter on quarter (qoq) wireless revenue growth.”
Subscriber additions have been declining since March, when the clean-up of inactive subscribers began to reflect in the system. This was also when operators raised voice tariffs, by withdrawing free minutes and discounts.
Idea Cellular and Bharti Airtel are expected to lead, with data growth of 12-13% in the quarter, they said.
Hitesh Shah and Abhishek Gupta of IDFC too see an about 1% qoq increase in RPM for India wireless business of Bharti and Idea due to withdrawal of promotional schemes and higher data usage.
“We expect Bharti/ Idea to report 2-4% qoq growth in absolute minutes,” they said.
However, data revenues may fall on account of recent 2G and 3G data tariff war in the quarter.
“While minutes of usage will continue to be stable, as will subscriber additions – which are only growing marginally – 3G data tariff war may result in a fall in data ARPM,” said Ankita Somani of Angel Broking.
Rationalisation on pricing and volumes will impact performance for others.
Suresh Mahadevan and Varun Ahuja of UBS in a note said, “Newer operators such as Tata DoCoMo, Aircel, and Telenor are focused on achieving Ebitda break-even. This has led to them scaling down unprofitable service areas.”
The rupee depreciation is also likely to result in forex losses, especially for Reliance Communications.
For Bharti and Idea, the currency depreciation would be more on foreign currency loans. Bharti is expected to report a Rs 600-650 crore loss, while Idea’s loss is seen around Rs 30 crore, according to IDFC.
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