Jio may outshine Airtel in June quarter revenue growth
Reliance Jio
may have outdone
Bharti Airtel
on overall revenue and per-user revenue growth in the first quarter ended June, driven by a strong addition of higher paying fixed wireless access (FWA) home broadband users, analysts said.
Market leader Jio's average revenue per user (ARPU) is expected to grow 1.8% quarter-on-quarter to '210 for the June quarter, boosted by the addition of 2 million FWA users out of a likely net addition of 7.2 million users, estimates by
JM Financial
showed.
Airtel is set to report a higher ARPU of '249, but its growth rate would be lower at 1.6%, the brokerage said.
Vodafone Idea
(Vi) is also expected to see ARPU improvement of 1.6% for the first quarter to '167 due to upgrades and improved subscriber mix and aided by one more day in April-June quarter compared to the preceding three months.
Analysts also expect the struggling telco to largely hold on to its user base on a net base - a first in a long time - backed mainly by a wider 4G network.
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To be sure, the flow through of price hikes made by telecom companies have been fully absorbed by now and the next round of increases can only be expected next year, equity research firm BofA Securities said in its report. The brokerage expects telcos to raise tariffs by around 12% then.
REVENUE GROWTH
Strong subscriber additions are also expected to translate to 2.7% sequential growth in Jio's revenue to '31,200 crore for the first quarter of FY26, JM Financial said. However, its standalone net profit is likely to remain flat at '6,640 crore "due to full quarter impact of higher depreciation and amortisation on account of capitalisation of 5G spectrum and net fixed asset towards end-4QFY25," it added.
Airtel's wireless services revenues are expected to grow 2.6% on-quarter to '27,305 crore while its consolidated net profit is expected to jump 47% to '7,690 crore mainly due to strong mobile broadband additions. JM Financial expects the telco to post a strong mobile broadband subscriber addition of 5.5 million in the June quarter, down from 6.6 million in the March quarter, while its overall subs addition is pegged at 2.3 million.
BofA in a report said, "We estimate (Airtel's) first quarter enterprise revenues again to be impacted as the company is exiting the low margin commodity wholesale voice business."
Loss-making Vi is predicted to close the first quarter with flat numbers as it scales up 4G services and expands 5G roll outs.
"With an improving network coverage, we expect VIL to report a largely flattish user base (versus declining net subscriber adds in the past). We consider this trend to sustain going ahead, given a better network now," BofA said.
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