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India's telecom industry could see another 12-15 per cent tariff hike over the next four to five months as the pricing environment has become more favourable following market consolidation, according to a Centrum Institutional Research report.
The pricing environment has become more favourable with only 3+1 players and we expect another 12-15% tariff hike over next 4 to 5 months," the report said. On the financial aspect of the telecom sector, three telecom operators, namely Bharti Airtel, Reliance Jio and Vodafone Idea Limited (VIL), are expected to report approximately 0.82.0 per cent quarter-on-quarter (QoQ) increase in Q2FY27 in average revenue per user (ARPU). The growth is expected to be led by 2G to 4G/5G migration, postpaid addition, and a higher number of days in the quarter. The report also noted that Bharti Airtel and Reliance Jio would continue to gain subscriber market share at the expense of VIL. "Reliance Jio is expected to add ~8mn subscribers QoQ, while Bharti Airtel is expected to add ~3mn India wireless subscribers QoQ," the Centrum report stated. "We expect VIL to add ~1.0mn customers QoQ. Data usage per customer would remain robust, led by growing penetration of 4G/5G network." The report highlighted network coverage developments across the sector, noting that Reliance Jio and Airtel have covered more than 95 per cent of districts with 5G services and the focus is on adding more 5G devices to their network. At the same time, VILs 5G network is present in around 200 cities, and it is ramping up its 5G coverage. "VIL is in active discussion with banks to close its Rs 250 bn debt fund raise which it needs as part of Rs 450bn capex program for FY27E-29E," the report noted. "Reliance Jio and Airtel are also seeing strong traction in terms of 5G FWA and fixed broadband addition as penetration in the segment remains low." For Reliance Jio, the report projected subscriber additions of 8 million QoQ to reach 541 million, with ARPU likely to grow by 1 per cent QoQ to Rs 218 per month. This growth is led by 5G FWA additions and a higher number of days in the quarter, translating into an estimated 2.6 per cent QoQ revenue expansion. Bharti Airtel is expected to add 3 million subscribers QoQ to reach 380 million, with ARPU growing by 2.0 per cent QoQ to an industry-leading Rs 269 per month, supported by ongoing 2G-to-4G migrations and quarterly day count. The company is expected to report approximately 3.1 per cent QoQ revenue growth. Vodafone Idea is projected to gain 1.0 million subscribers QoQ to reach 194 million, alongside a blended ARPU growth of approximately 0.8 per cent QoQ to Rs 178 per month. Management commentary on VIL's capex activity and fundraising progress will be closely tracked. Apart from these three telecom companies, the report noted that Indus Towers is expected to see approximately 1.7 per cent QoQ revenue growth on the back of a 1.5 per cent QoQ increase in the number of co-locations amid growing capex from VIL as it focuses on expanding coverage/capacity. Tata Communications is expected to report 1.6 per cent QoQ revenue growth, supported by improving traction in Digital Platform and services of the data segment. It is expected to report approximately 61bps sequential improvement in EBITDA margin to 19.3 per cent. (ANI)
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