Analysts: Reliance Jio, Bharti Airtel Quiet, Vodafone Idea May Narrow Losses in Q1

Reports suggest that Reliance Jio and Bharti Airtel are likely to report marginal growth in mobile revenue and ARPU in Q1. Also, the reports indicate Vodafone Idea will suffer declines on both metrics. It may manage to slow down its decline in the quarter, however.

Quiet First Quarter for the Telcos

Vi will register a decline because of a fall in data consumption. Also, it had handed out free recharges to a large number of its low-income users, which might contribute to the decline. On the other hand, analysts said Reliance Jio and Airtel will gain decent customer additions in Q1. Their growth will also likely come at the expense of cash-strapped Vi.  Vodafone Idea has been unable to fight rivals at the 4G front, which will contribute to customer losses.

Vi’s Q1 loss will narrow slightly to ₹6,629 crore. The telco will remain hampered by heavy customer losses and a sizable shrinkage in its data user base.

Analysts estimate that reduced data usage and impact of free recharges will cause Airtel and Jio reporting marginal ARPU growth. By contrast, Vi’s ARPU is estimated to drop by 1.7% Q-o-Q.

Morgan Stanley Reflects Positive Q1 for Reliance Jio

Morgan Stanley estimates Reliance Jio to report a 5.7% growth in net profit in the June quarter to ₹3,552 crore.  The firm said that the telco will get help from its higher operating income and good customer additions. This projection will make the first quarter Jio's 15th successive net positive quarter.

Emkay Expects Reliance Jio to Outpace Bharti Airtel Again

Emkay has tipped Airtel’s Q1 net profit to narrow sequentially to around ₹318 crore. The firm cited muted ARPU growth and a sharp moderation in data subscriber adds. The firm also said that Airtel will add only around 1.6 million data users in the April-June period. Notably, the telco had notched up an average 10 million over the last four quarters.

Emkay Research expects Jio to outpace Airtel on customer additions in the first quarter. The firm said that because of  the "full impact of the JioPhone tariffs launched in Feb 2021", Jio will edge out Airtel.

Telcos to Report Sequential Dips: JM Financial

JM Financial expects the telcos to report dips in their respective average monthly data usage (AMDU) per user in Q1. The firm cited the second wave of the Covid-19 pandemic, hampering the professional and middle income category users that drive the bulk of the data usage.

It also said that Jio will add around 8 million users in the quarter just gone. That figure is almost half of the 15.4 million it managed in the quarter before. That will however increase the Mukesh Ambani-led telco's user base to 434 million. Further, it said that Airtel will only gain around 25% of Jio's gains, that is, around 2 million. That addition will take the telco's user base to 323 million.

On the other hand, Vi, could have lost as many as 7 million users in the quarter. This can come after two quarters of limiting user losses, shrinking its base to 261 million.

JM Financial estimates a relatively muted quarter in terms of user adds and sequential ARPU growth. The brokerage firm said that Jio and Airtel will report around 3.3% and 3.2% revenue growth in Q1. In turn, Vi will report around 3% decline in the same.