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All private telecom operators have lost subscribers in this quarter but saw a robust increase in their average revenue per user (ARPU) because of recent tariff hikes according to a report by Centrum.
ARPU for the wireless segment of private telecom operators was positively impacted due to tariff hikes implemented in July'24. Bharti Airtel continues to maintain its lead with ARPU of Rs 233/month for the quarter, up from Rs 211/month in the first quarter of FY25 Reliance Jio reported ARPU of Rs 195/month compared to Rs 182/month in Q1FY25 whereas VIL reported ARPU of Rs 156/month from Rs 146/month in Q1FY25. The report says the tariff hikes will help the telecom operators to drive higher ARPU and it will be seen in a couple of quarters for the full impact of the tariff hike to flow through. However, the operators lost subscribers because of SIM consolidation on account of tariff hikes implemented in July 2024. Bharti Airtel lost around 2.9 million (QoQ) mobile subscribers to reach 352 million. Reliance Jio lost around 10.9 million subscribers in the quarter to reach 479 million subscribers whereas Vodafone Idea (VIL) lost 5.1 million subscribers in this quarter mainly in the 2G segment to reach 205 million subscribers. This quarter also saw increased porting to the government-owned telecom operator BSNL, from private operators as tariffs were not raised by BSNL. The report says SIM consolidation is expected to be largely over by the end of the third quarter of the current fiscal. It adds that besides tariff hikes, ARPU for the sector will continue to grow also led by subscribers moving from 2G to 4G and growth in post-paid subscribers. Average voice/data use is expected to increase with this migration. Both Airtel and Reliance Jio are adding more cities to their 5G coverage with presence across most districts of India. About 148 million Jio subscribers have migrated to 5G and 105 million Airtel subscribers moved to 5G. With more 5G subscriber's data usage is expected to increase thereby increased revenue and ARPU for telecom operators. The report says with these changes and reforms of September 2021 telecom sector is moving towards some sort of stability. Tariff hike in Dec 2019, Nov 2021 and July 2024 has led to steady rise in operators ARPU. About the revival of VIL, the report says the government now has 24 per cent equity stake in VIL. The company is in discussion with banks to raise debt capital of Rs 250 billion for its capex plans of Rs 500-550 billion over the next 3 years to improve its network capacity. The company has also announced its plan to launch its 5G services in another 6 months. However, the net debt of the company still stands at Rs 2.0 trillion at Net debt/EBITDA of 12x on FY24 EBITDA, remains high. But with strong demand from 5G rollout, Indus Towers continues to see strong growth and it is expected that its receivables issue should see early resolution with the successful fund raise by VIL. (ANI)
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