Higher data usage & 4G additions to boost Airtel, Jio revenues in Q1
Jio, however, is expected to add more customers than Airtel, with additions at the latter partly dragged by the impact of the sharp hike taken in base prepaid rates across India.
Jio, however, is expected to add more customers than Airtel, with additions at the latter partly dragged by the impact of the sharp hike taken in base prepaid rates across India.
The muted growth in Airtel’s active subscriber base can be attributed to a limited impact of the entry level tariff hikes it implemented in pre-paid, analysts said.
On Friday, Jio reported a 13% on-year rise in net profit in the fiscal fourth quarter to Rs 4,716 crore, on an 11.9% increase in revenue from operations to Rs 23,394 crore. It added 6.4 million subscribers in the three-month period, taking its total subscriber base to 439.3 million at March end.
"5G is being deployed rapidly across the country, but revenues can be gained from the same only once the market matures, use cases are established and the enterprise uptake of the services is realised," COAI director general SP Kochhar told ET.
"Jio and Bharti will likely gain market share in Q4FY23 from Vi, which struggles to survive without continued government aid...Jio (has) continued to make aggressive investments in 5G and even Bharti has upped the ante on capex," BofA Securities said.
The pace of rival Bharti Airtel’s active user additions was steady but slower at 1.3 million, taking its January active user base to 366 million. Vodafone Idea continued to lose active users – 0.5 million – further reducing its base to 209 million.
Smartphone brands are offering 5-15% discount on some models with demand continuing to be low while refrigerator manufacturers like LG, Samsung and Haier have dropped prices of popular models including entry-level ones by up to Rs 4,000.
The report published by ICICI Securities claims 5G capital expenditure will be lower than 4G, as the previous generation was deployed over multiple spectrum bands. The 5G rollout is also assumed to be faster than 4G.
Bharti Airtel increased the minimum tariff by a whopping 56% from Rs 99 to Rs 155 in the two circles in November, before expanding to 15 more in end-January 2023, in a bid to increase its average revenue per user.
"Revenue growth has been below expectation as consumer electronics, lighting and mobile phones key verticals for the company has seen steep decline. We however upgrade the stock to Neutral as the stock has already corrected sharply and strong growth momentum is expected to resume. We roll forward our valuation multiple
They said Jio’s modest 0.6% sequential rise in ARPU, a key performance metric, to Rs 178 was largely driven by higher wired broadband customer additions as well as more revenue from enterprise services. Experts said the modest quarter-on-quarter increase in Jio’s average data usage per customer to 22.4 GB was also aided by its growing base of wired broadband users who consumed higher quantities of data.