Telecom companies’ Q1 revenue growth expected to moderate

The revenue growth of telecom companies is expected to moderate in Q1 FY23, due to limited residual impact of the December tariff hike and muted subscriber additions. As per analysts, among the three private mobile companies, Reliance Jio is likely to see around 3-3.5% revenue growth, followed by 2-2.5% for Bharti Airtel and around 1% for Vodafone Idea (VIL).

According to analysts, the industry continues to see outsized churn in the lower average revenue per user (Arpu) segments, while upgrades to high-Arpu plans are likely to be limited at around 8-9 million, due to limited availability and higher smartphone prices in the wake of the semiconductor chip shortages.

Further, the quarter will also see an impact from higher inflation and oil prices on telcos’ numbers. “We expect Reliance Jio to show a better quarter on the back of its subscriber momentum bouncing back — we estimate 7.5 million net adds by Jio, far better than Bharti and VIL,” BofA Securities said.