FY23-25, Exciting times ahead for telecom vendors

Financial analysts estimate Jio’s CapEx on 5G networks to be Rs 69150 crore and Airtel’s to be Rs 58500 crore, total amounting to Rs 1.28 lakh crore.

Voda Idea’s plans are yet not clear. Vodafone Idea CEO Akshay Moondra, had said at the AGM yesterday, “We are in discussion with various vendors for 5G procurement. We are also in discussions with the banks for funding arrangements. And once these two things are in place, we will be taking action to deploy 5G.”

BofA Securities
“We expect Bharti and Jio to spend $7.7 billion/$9.1 billion on capex (excluding spectrum) from FY23-25 and expect them to curtail their 3G/4G capex and spend largely on 5G going ahead.”

Goldman Sachs
“Jio will have to increase its annual earnings before interest, tax, depreciation & amortization (Ebitda)/revenue by ₹32,000 crore/₹50,000 crore to generate double-digit (post-tax) returns on its incremental investment of ₹2 lakh-crore on 5G.

Our sensitivity analysis shows this would require a significant (₹100 per month, or +57% vs. current levels) average revenue per user (Arpu) increase or 150 million incremental subscriber gains coupled with an Arpu increase of ₹25 a month, or a combination thereof.

Even if Jio garners 50% of Vi’s current annualised revenue run-rate of ₹37,200 crore (all else equal), its incremental annual revenues at ₹18,600 crore would still be lower than the amount required to generate double-digit returns on its 5G capital investment.”

CT Bureau