Reliance Jio is expected to surpass Bharti Airtels India mobile revenue for the first time, in the quarter ended December 2018, while posting yet another net profit growth, boosted by strong subscriber additions, say analysts.
In contrast, Indias new telecom market leader Vodafone Idea and second-largest Bharti Airtel are likely to report sizeable losses on higher costs, despite a slower decline in revenue, helped by an expected turnaround in average revenue per user (ARPU) as their minimum recharge plans start to take effect, analysts add.
For Vodafone Idea, brokerage ICICI Securities estimated a net loss of Rs 4,001.7 crore in the fiscal third quarter, narrower than the Rs 4,974-crore loss in the July-September period, as benefits of synergies start to kick in. The newly-formed telco—born out of the recent merger of Vodafone India and Idea Cellular—will present consolidated earnings the second time.
VILs revenue in the December quarter is estimated to be in the Rs 11,414-11,703 crore range by brokerages Credit Suisse and ICICI Securities. This compares with over Rs 12,000 crore revenue in the July-September period.
Brokerages expect Sunil Mittalled Bharti Airtel to report a net loss in the range of Rs 649 crore to Rs 1,141 crore—a first in nearly 16 years. The company eked out a surprise Rs 119 crore net profit on a consolidated basis in the September quarter, helped by a one-time exceptional gain, but its India losses had worsened.
Bharti Airtels revenue is estimated to be in the Rs 20,428-20,447 crore range for the December quarter.
Jio is estimated to report its fifth successive quarter in the black, with ICICI Securities pencilling in a 49 per cent on-year jump in the companys net profit to Rs 751 crore, driven by an “estimated 30.7 million subscriber adds”. The brokerage estimates Jios December quarter revenue to grow nearly 12 per cent sequentially to Rs 10,327 crore, which, it said, would for the first time be higher than Airtels India mobile revenue.
Brokerages Credit Suisse and Kotak Institutional Equities have estimated Bharti Airtels India mobile revenue to be in the Rs 997-10,148 crore range in the fiscal third quarter. “Wireless revenue (for Bharti Airtel and Vodafone Idea) will continue to decline in Q3 albeit at a slower rate in wake of steps taken by companies to improve their ARPU by improving ARPU from low-end customers,” said brokerage Axis Capital.
Indias two older telcos October launch of minimum recharge plans—aimed at weeding out nonrevenue generating low-end users and improving ARPU—will start showing some positive impact though the full effect will be visible in the January-March quarter, analysts said.
ICICI Securities estimates Airtel and VILs monthly ARPU, a key performance metric, to rise 3.3 per cent and 1 per cent on-quarter to Rs 103 and Rs 89, respectively, in the third quarter FY19. Jios ARPU, it estimates, will fall 2.3 per cent on-quarter to Rs 129, due to a higher mix of 4G feature phone users.
Axis Capital expects Airtel to have lost around 10 million subscribers in the fiscal third quarter. Vodafone Idea has lost nearly 14 million customers in October and November 2018 alone, according to latest subscriber data collated by the telecom regulator and Cellular Operators Association of India (COAI).
“Stagnant industry revenue, market share gains by Jio coupled with increase in network expansion costs should hurt mobile Ebitda for Bharti, although this will be largely offset by strong Africa numbers,” Credit Suisse said.
Original Article
[contf]
[contfnew]
ET Markets
[contfnewc]
[contfnewc]
