Muted Q4FY23 expected for telcos

We expect Reliance Jio (Jio) to lead subscriber addition with ~6.5 million (mn) net sub additions during Q4. Bharti Airtel (Airtel) is likely to add modest ~1 mn subscribers owing to SIM consolidation amid 2G base tariff hike. On the other hand, churn at Vodafone Idea (VIL) will continue with subscriber loss of ~4 mn. ARPU growth is expected to be muted across telcos as upgrades benefits will be offset by lower number of days in the quarter. We expect Jio, Airtel, VIL’s reported ARPU to be up 0.6%, 0.5%, 1% QoQ at ~| 179, | 194, | 136, respectively. For Jio, revenues are expected at | 23455 crore, up 2% QoQ. Airtel’s India wireless revenue is expected to witness 1.3% QoQ growth at | 19,606 crore. For Vodafone Idea, we expect overall revenues to be down ~1% QoQ at | 10,519 crore.

The network opex for top two telcos will go up with 5G rollout. Airtel India EBITDA margins are expected at 52.7%, flat QoQ, given the higher network opex on 5G rollout. Overall consolidated margins are expected at 51.1%, down 40 bps QoQ, owing to weak Africa margins. We expect PAT at | 2440 crore for Airtel. For Jio, we expect EBITDA margins at 51.6%, down 60 bps QoQ due to higher network expenses on account of 5G and net profit at | 4510 crore. For Vodafone Idea, we expect margins at 38.7%, down 70 bps QoQ. The company is expected to post a net loss of | 7960 crore.

For report, https://www.communicationstoday.co.in/result-preview-telecom-icici-direct/

CT Bureau