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    Airtel, Vodafone Idea mobile revenue, operating income likely to dip

    Synopsis

    But both of India’s older telcos are likely to gain on margins front, courtesy lower sales, marketing costs and commissions during the pandemic, which may help narrow losses sequentially.

    ET Bureau
    KOLKATA: In the first post-Covid estimates, Bharti Airtel and Vodafone Idea (VIL) are likely to report sequential falls in mobile revenue and operating income in April-June as many of their feature phone users could not recharge during the lockdown, analysts said.

    Market leader Reliance Jio though, they said, would stave off Covid-19 blues and report higher revenue, operating income as well as strong profit growth in the three-month period, helped by the delayed impact of tariff hikes taken last December, decent customer adds and aggressive debt restructuring.

    But both of India’s older telcos are likely to gain on margins front, courtesy lower sales, marketing costs and commissions during the pandemic, which may help narrow losses sequentially.

    VIL though is set to suffer heavy customer losses—likely 15 million, shrinking its user base to around to 276 million. Axis estimates Jio to have added 5.8 million users on-quarter to end at 394 million, while its expects Airtel to hold on to its 284 million-strong user base.

    “Airtel and VIL’s revenues will be impacted by the Covid-19-led lockdown as many of their feature phone users could not recharge in the June quarter, and latter’s revenues will further suffer due to continued subscriber losses,” Axis Capital said in a note seen by ET. Analysts estimate around 40% of Airtel and VIL’s customers are feature phone users.

    Emkay Global added that VIL and Airtel’s India wireless revenue fall would be due to SIM consolidation and absence of international roaming revenues.

    Axis estimates Jio to report an almost 13% sequential rise in net profit in the June quarter at Rs 2,593.4 crore—its 11th successive quarterly profit. Revenue is estimated to grow 6% on-quarter and 27% on-year to Rs 15,724.40 crore. Emkay estimates Jio’s profit after tax to grow 11% on-quarter, aided by “lower interest charges, post-fund raise” (by Jio’s parent, Jio Platforms) and debt-restructuring” in the March quarter of FY20.
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