How Have the Telcos Performed in the Q2 of FY21-22?

The telcos have had a roller coaster of a second quarter of the FY22. As the telcos compile the results for the next fiscal, consultancy firms such as Jefferies, BofA Securities, Emkay and other analysts give their take on how the quarter gone by went. And according to them, Bharti Airtel might just pip Reliance Jio to the throne during the second quarter of the current fiscal.

Bharti Airtel to Snatch Top Spot?

The analysts have said that Bharti Airtel can come out on top off the back of a strong sequential growth in the mobile revenue sector. The telco had also increased tariffs over the quarter, which would have also boosted its ARPU.

Jefferies estimated that Airtel can see its mobile revenues "grow 7.1% sequentially compared to Jio’s 4.7% in the July-September period". What's more, the brokerage firm said that Airtel's ARPU can also jump "7.3% on-quarter to Rs. 157".

Moreover, Jefferies said that the telco's quarterly net profits to increase by more than 300%. It added, "driven by growth in ARPUs on account of tariff hikes", Airtel's net profit will reach, QoQ, to Rs. 970 crore. However, the telco will see its subscribers base shrink by 4 million overall; the telco had taken quite a hit in May. Since then, it has not really recouped the subscribers it has lost. The tariff hike in prepaid voice segment has seen Airtel record churn this high for the first time in a long time.

In other metrics, the telco's quarterly consolidated revenue will grow 5.3% sequentially, Jefferies added. It said that a likely 3% sequential rise in Africa business and good data usage will drive the said growth.

Jio in Unfamiliar Territory

Even though Reliance Jio has gained a staggering amount of customers over the quarter, it will see its ARPU grow only slightly, reaching Rs. 140. During the second quarter, the largest telco in the world gained 14 million new users. Jio has some of the most lucrative plans, and its JioPhone series keeps drawing users to the telco.

However, this gamble has affected its ARPU drastically, analysts added. Jefferies have tipped Jio to report a rise in net profit of about 6% Q-o-Q, to Rs. 3,700 crore. Notably, this would be Jio's 16th successive quarter in the positive.

On the other hand, BofA Securities said that Jio’s Ebitda margins will remain "stable Q-o-Q".

Vi Completes the Podium - Yet Again

On the other end of the spectrum, Vodafone Idea will report modest gains in revenue for the quarter just ended; like Airtel, it had hiked the prices of its base packs as well. BofA Securities had said that Vodafone Idea's Ebitda margins will "slightly decline for Vi, on back of higher marketing and personnel costs".

However, the telco can record customer churn of about 10 million over the Q2; given that the telco has failed to put in required capex to compete with its rivals on the 4G front. The bad news does not end here; Emkay has estimated its quarterly loss to widen to Rs. 7,527.2 crore.

Vodafone Idea has a large chunk of its users in the rural areas. As such, its recent price hikes will see the user churn intensify. Emkay added, “tariff hikes effected by Vi in July could lead to a softening of its subscriber base with an (estimated) 10 million decline".

In a silver lining for Vi, the telco will see its Q2FY22 revenues increase 2.5% sequentially, and an ARPU jump of 6%, taking the latter to Rs. 110.