Bharti Airtel fared better than both Jio and Vodafone Idea in Q2

Kolkata: Bharti Airtel turned in a stronger operational performance than rivals, Reliance Jio and Vodafone Idea (Vi) in the seasonally weak fiscal second quarter, underlined by higher user additions, revenue growth, voice minutes usage and data consumption, which reflected strong market execution, say analysts. The Sunil Mittal-led telco’s India cellular business growth, they said, was stronger sequentially at 7.4% than Jio’s 5.5% and Vi’s 1.2%, and its 13.9 million net customer additions was nearly double that of Jio’s 7.3 million, while Vi lost 8 million customers in the just-ended quarter.“The strong net adds (13.9mn) reported by Bharti in Q2 indicated that it had gained market share, likely at the expense of VIL,” brokerage UBS said in a report.Jio’s 7.3 million net user adds “was lower than the 9 million it had estimated,” said BofA Securities. P Morgan said the telco’s management attributed this to “SIM consolidation” following Covid-19 impact on recharge cycles of migrants.Jio, which had added some 10 million customers in the June quarter, though is still far ahead of its rivals, with a user base of 405.6 million, compared with 293.74 million for Airtel and 271 million for Vodafone Idea.Jio’s net profit nearly trebled on-year in the July-September period -- its 12th profitable quarter in a row – helped by higher mobile recharge volumes as lockdown curbs were eased, lower finance costs and continuing customer adds.Airtel, in turn, posted a narrower net loss in July-September and a record 22% on-year jump in quarterly revenue, while Vi, despite also narrowing quarterly losses, flagged risks around its business viability amid continuing heavy customer losses.“While the company (Vodafone Idea) continues to execute well on the cost-cutting front, subscriber dip leading to revenue loss is impacting profitability,” Edelweiss said.Analysts said Airtel’s ARPU – a key performance metric – at Rs 162 was higher than Jio (Rs 145) and Vi (Rs 119), and its data usage per customer at 16.4 GB, too was more than Jio and Vi’s identical 12 GB level. Its voice minutes of usage at 1,005 was also above Jio’s 776 and Vi’s 673 respectively.“However, VI gained 3.4 million wireless broadband (3G+4G) subs and 1.5 million 4G subs,” which pushed ARPUs up 4% on quarter),” said UBS.To be sure, Edelweiss said that despite slower 4G user adds, Jio’s “on-quarter ARPU improvement had sustained revenue growth for the telecom market leader. “We expect some recovery in Jio’s subscriber adds in the coming quarters, but believe it’s unlikely to go to the 20 million+ historical quarterly run-rate, which is why, traction of Jio’s home broadband and other digital initiatives will be crucial.”JP Morgan said the "3% sequential rise in Jio’s voice MoU suggested that telco is gaining prominence as a primary SIM (read: mobile connection)”.Jefferies, in turn, said Vi’s average data usage at 12GB and voice usage at 673 minutes were stable over the past two quarters, implying limited downtrading, or users moving to lower price plans.Goldman Sachs expects Vi’s ARPU to rise gradually, which is why it feels the telco must hike tariffs quickly to get even close to the targeted 2x (ARPU) level. It expects Vi to raise rates before calender-2020 ends.

from Economic Times https://ift.tt/35So5kb