Q4 telecom review: revenue up 2%, user addition at a 12-quarter high Q-o-q

Telecom providers recruited 15 million new customers in the January–March quarter, which was the largest increase in the previous 12 quarters. The rise in gross subscriber acquisition was attributed by analysts to a minor slowdown in customer turnover across all providers.

Airtel and Jio Net gained 7 million and 11 million users, respectively, during the January–March quarter, while Vodafone Idea lost 2.6 million customers.

Jio had 481.8 million overall users at the end of the quarter, followed by Airtel with 352.3 million and Vodafone Idea with 212.6 million.

“Despite one fewer day in Q4, both Bharti and VIL saw a 0.5-0.7% sequential average revenue per user (Arpu) growth, driven by an improving subscriber mix. Jio’s Arpu was flat quarter-over-quarter (q-o-q), impacted by unlimited 5G data and rising traction in the feature-phone segment,” according to a note from brokerage house Jefferies.

Jio’s Arpu was Rs 181.7, Airtel’s was Rs 209, and Vodafone Idea’s was Rs 146.

The top three operators’ revenue growth during the quarter decreased marginally, rising by 2% sequentially and 10% year over year to Rs 58,600 crore. Improved subscriber mix and quarterly 4G/5G customer additions drove this rise.

According to Jefferies, India’s mobile income grew for the eighteenth consecutive quarter, peaking at $30 billion (or more than Rs 2.4 trillion annualized).

Reliance Jio’s income from operations increased 2.3% on a quarterly basis to Rs 25,959 crore when considering just operator revenue. At Rs 28,513 crore, Airtel’s India revenue increased 2.5% on a sequential basis. Operational revenue for Vodafone Idea decreased 0.6% on a quarterly basis to Rs 10,607 crore.

Analysts predict that although Vodafone Idea lost 55 basis points of market share, Bharti Airtel and Jio both gained 30 basis points.

“Liquidity concerns have impacted Vodafone Idea’s capital expenditure, but following the recent equity raising of Rs 18,000 crore and the Rs 2,000 crore from Birla group, the company’s capex should improve,” brokerage firm CLSA said.

CLSA said, “We are still optimistic about Jio, but Bharti is still our top choice with leading Arpu and growth.”

Analysts say that even in the absence of a tariff increase, the sector’s revenue gain during the quarter was unexpected, albeit a tariff increase will probably be necessary to achieve additional improvements. Analysts predict that in FY25, the market share will continue to move in favor of Jio and Airtel.

Jefferies predicts that although Arpu growth would probably be constrained by limitless 5G plans, attention to 5G monetisation may increase in the latter part of this year.