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<ul><li><keyword id="6354504" type="General" weightage="80" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword>, <keyword id="6354287" type="General" weightage="80" keywordseo="bharti-airtel" source="Orion">Bharti Airtel</keyword> and <keyword id="1553175" type="General" weightage="80" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword> are expected to report another stable quarter with moderate revenue growth.</li><li><keyword id="6383126" type="General" weightage="80" keywordseo="telcos" source="Orion">Telcos</keyword> have been witnessing a slowdown in 4G subscriber additions and rising costs due to the 5G rollout.</li><li>Analysts suggest the much-expected tariff hikes will be the “key trigger” going forward.</li></ul>Slowdown in 4G subscriber additions and lack of tariff hikes in over a year could slow down revenue growth of India’s telecom companies, according to analysts. While the market leader Reliance <keyword id="2003276" type="General" weightage="80" keywordseo="jio" source="Orion">Jio</keyword> is expected to report a net addition in subscribers, its rivals Bharti <keyword id="15491" type="General" weightage="20" keywordseo="airtel" source="Orion">Airtel</keyword> and Vodafone Idea are expected to report a decline, as per an <keyword id="46909" type="General" weightage="80" keywordseo="icici-securities" source="Orion">ICICI Securities</keyword> estimate. And it would have an effect on the revenues of the sector as a whole. “Our Q3FY23 estimates suggest a deceleration in mobile revenue growth across telcos due to SIM consolidation, lower benefit of premiumisation from slowdown in 4G net add, and absence of tariff hikes,” said an ICICI Securities report. Overall, analysts expect the three telcos to report earnings growth in the range of 9.4-19.7% year-on-year. Reliance Jio is expected to report the highest revenue growth at 19.7% YoY while its close rival Airtel is expected to report a 17.5% increase. Vodafone Idea, on the other hand, is expected to report revenue growth on the lower end at 9.4%, according to ICICI Securities. Overall, on a sequential basis, the revenue growth is expected to flat – in the range of 0.1-1.7% — with Vi being on the lower end once again. <cmsannotation type="cmsannotation" annotationid="Tariff hike the ‘key trigger’ going forward" comment="subhead" text="Tariff hike the ‘key trigger’ going forward">Tariff hike the ‘key trigger’ going forward</cmsannotation> Going forward however, telcos are expected to<a href="https://www.businessinsider.in/business/telecom/news/bharti-airtel-and-reliance-jio-could-hike-tariffs-by-as-much-as-10-according-to-analysts/articleshow/96375427.cms"> deliver a 10% tariff hike in Q4 FY23</a>. Tariff hikes, analysts say, are “key triggers” for telecom stocks. “From an industry structure, balance sheet and cash flow viewpoint, telcos remain one of the best positioned and a defensive play to navigate through the market uncertainties, if any. Potential tariff hike is the key trigger,” said a report by Dolat Capital. Telcos have been expected to announce tariff hikes for quite some time now – the last tariff hike in the industry was in December 2021. Analysts had expected telcos to deliver a similar hike in December 2022, which never materialized. While Jefferies sees a tariff hike in Q4 FY23, analysts at IIFL Securities suggest the hike could happen only by mid-2023. “Considering large 5G investments and higher network costs on addition of 5G equipment to towers, we believe the next 4G prepaid tariff hike could probably be in mid-2023. Pushing tariff hikes closer to 2024 elections raises the risk of political backlash,” IIFL Securities noted. Despite rolling out 5G services back in October, both <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-and-airtel-5g-prices-may-be-affordable-for-now-but-expected-to-increase-after-wider-rollout/articleshow/94636173.cms">Airtel and Jio are offering 5G services at no added cost</a> to their subscribers. Cumulatively, the three telcos spent ₹1.5 lakh crore towards their <a href="https://www.businessinsider.in/business/telecom/news/heres-how-much-mobile-bills-can-increase-from-5g-network-service/articleshow/93312184.cms">spectrum purchases</a>. <cmsannotation type="cmsannotation" annotationid="Increased churn adds to lack of tariff hikes" comment="subhead" text="Increased churn adds to lack of tariff hikes">Increased churn adds to lack of tariff hikes</cmsannotation> As the timelines for possible tariff hikes are yet to emerge, the margins will remain stressed as there is one more pain point that’s added to the sector in the form of increased <a href="https://www.businessinsider.in/business/telecom/news/bharti-airtel-and-reliance-jio-could-hike-tariffs-by-as-much-as-10-according-to-analysts/articleshow/96375427.cms">subscriber churn. Telecom users </a>started shopping for better plans in the last four months. According to the telecom subscriber data for October 2022 released by the Telecom Regulatory Authority of India (TRAI), the number of MNP requests in October surged to 11.81 million – close to September’s 11.97 million, which is the highest in 2022. “The rise in MNP requests over the past five months implies increasing competition for subscribers in the market. This is also evident from the higher churn levels seen during Q2 FY23 across telcos,” said the Jefferies report. Additionally, the rollout of 5G and Jio offering unlimited high-speed data is also likely to change the competitive landscape of the sector. “Subscriber (sub) base for Bharti Airtel and Vodafone Idea is likely to shrink while Reliance Jio’s net sub additions (+5mn) may moderate,” said a report by ICICI Securities. The scrambling for high-end 5G customers in a market that’s already saturated will make the telecom market much tougher, putting margins for the sector under pressure. <div type="javascript" title="Custom" contenttype="Text"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/sbi-hdfc-bank-axis-bank-among-other-private-and-public-bank-earnings-could-see-a-further-ramp-up-in-q3-2022/articleshow/96768992.cms">Bank earnings could see a further ramp up in Q3, say analysts</a> <a href="https://www.businessinsider.in/business/startups/news/skippi-ice-pops-what-this-hyderabad-popsicle-brand-is-doing-after-raising-rs-1-crore-from-shark-tank-india-season-1/articleshow/96759786.cms">Skippi Ice Pops – how the Hyderabad-based popsicle brand fared after bagging a ₹1 crore deal on Shark Tank India S1</a> <a href="https://www.businessinsider.in/business/corporates/news/tcs-infosys-wipro-and-other-it-companies-earnings-preview-for-q3-fy23/articleshow/96731891.cms">December quarter likely to be a weak one for the IT sector – Infosys amongst top analyst picks</a>

Churn and fewer 4G subscribers to slow down telecom revenue growth in Q3

<ul><li>India’s second largest telecom company Bharti <keyword id="15491" type="General" weightage="20" keywordseo="Airtel" source="Orion">Airtel</keyword> is likely to be the biggest beneficiary of <keyword id="1553175" type="General" weightage="20" keywordseo="Vodafone-Idea" source="Orion">Vodafone Idea</keyword>’s troubles. </li><li>While Airtel already boasts of the industry-best average revenue per user (ARPU), thanks to higher quality subscribers, lower churn and higher consumption are now aiding the company’s bottom line. </li><li>Going forward, analysts have underlined why Airtel and not market leader Reliance Jio is expected to make the most out of Vodafone Idea’s troubles. </li></ul>India’s second largest telecom company Bharti Airtel is likely to be the biggest beneficiary of Vi’s troubles, regardless of whether the Indian telecom market continues to operate as it is today with three players or becomes a duopoly. Since Reliance Jio’s debut in 2016, the Indian telecom sector has seen a massive upheaval and consolidation. From nearly 9 active telecom companies in the private sector, only Jio, Airtel and Vodafone-Idea have active operations, and they account for 91% of India’s total subscriber base. While Vodafone Idea is struggling to retain its subscribers and cut down on losses, Jio and Airtel have consolidated their leads and expanded their market share over the past two years. Vodafone Idea’s market share has fallen from 24% at the end of March 2021 to just 20.7% two years later. Airtel<a href="https://www.businessinsider.in/business/telecom/news/bharti-airtel-q4-net-profit-jumps-50-yoy-to-3006-crore-beats-estimates/articleshow/100280246.cms"> reported</a> a 50% YoY jump in its Q4 net profit to ₹3,006 crore. Better quality subscribers, increasing consumption and lower churn helped the company shore up its bottom line during the quarter. “We are seeing lower churn and we are also seeing a growth in consumption,” said Gopal Vittal, chief executive officer and managing director, Bharti Airtel in a post-earnings call with analysts. For context, while Vodafone Idea lost nearly 1.96 million subscribers per month in FY22 and FY23, Airtel added an average of 0.8 million subscribers per month while Jio added 0.3 million subscribers per month. Net subscriber additions in FY22 and FY23 <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY22 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY23 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Reliance Jio </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-18.8 million </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">26.1 million </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.3 million </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bharti Airtel </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.9 million </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10.5 million </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">18.4 million </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Vodafone Idea </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-22.9 million </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-24.0 million </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-46.9 million </td></tr></tbody></table> Source: <keyword id="6356988" type="General" weightage="20" keywordseo="TRAI" source="Orion">TRAI</keyword> Underlining Vodafone Idea’s steep fall is the fact that post the merger of Vodafone India and Idea Cellular in August 2018, the merged entity had 440 million subscribers. Fast forward to March 2023, its subscriber base has declined to 237 million, which is a decline of 203 million. The analysts at Macquarie Research say that regardless of what happens to Vodafone Idea, the outlook looks bright for Airtel, ahead of market leader Reliance Jio. <cmsannotation type="cmsannotation" annotationid="Airtel the biggest winner regardless of Vodafone Idea’s survival" comment="subhead" text="Airtel the biggest winner regardless of Vodafone Idea’s survival">Airtel the biggest winner regardless of Vodafone Idea’s survival</cmsannotation> With Vodafone Idea’s troubles not showing any signs of receding anytime soon, analysts at Macquarie Research believe that Airtel could end up being the biggest winner instead of market leader Reliance Jio, estimating the telco’s subscriber base, average revenue per user (ARPU) and ROIC. Return on invested capital, or ROIC, is a financial metric that measures a company’s ability to efficiently allocate assets to profitable ventures. Higher the ROIC, the better it is. “The incremental operating leverage at Bharti Airtel is much higher than Jio due to an already optimized cost structure at Jio and with finance charges set to catch-up and sticky depreciation &amp; amortization charges,” says Macquarie in its report, explaining why it expects Airtel and not Jio is expected to be the biggest winner regardless of what happens to Vodafone Idea. <cmsannotation type="cmsannotation" annotationid="The white knight" comment="subhead" text="The white knight">The white knight</cmsannotation> The first scenario involves the telco being bailed out via capital infusion and a growth in its ARPU to cover its liabilities over the next 10-15 years. In this scenario, while Jio and Airtel are not expected to gain much in terms of subscribers, Airtel’s higher incremental operating leverage than Jio puts it in a better position. As a result, its ROIC is expected to rise from existing 6% to 10-14% by FY27, while Jio’s ROIC is expected to rise from 7% to 7-10% in the same period. <cmsannotation type="cmsannotation" annotationid="The slow grind" comment="subhead" text="The slow grind">The slow grind</cmsannotation> If things don’t change and Vi is unable to raise funds and invest in its network, analysts expect the telco to continue losing subscribers and its market share falling to just 15% by FY30. In this scenario, Reliance Jio could expand its subscriber base to 500 million, followed by Airtel at 365 million and Vodafone Idea at 200 million. Airtel is expected to take the lead in two other critical metrics – ARPU and ROIC. Its ARPU is expected to rise to ₹250 by FY27, while Jio is expected to remain in the second place at ₹235. Airtel’s ROIC is expected to rise to 10-13%, with Jio once again in the second place at 7-10%. <cmsannotation type="cmsannotation" annotationid="Duopoly" comment="subhead" text="Duopoly">Duopoly</cmsannotation> Duopoly is the worst-case scenario for Vodafone Idea. If the telco winds down its operations, Jio and Airtel could gain in terms of subscribers as well as ROIC. In this case, Jio’s subscriber base could rise up to 585 million by FY27, with Airtel coming in second place at 455 million. However, Vodafone Idea’s exit could lead to even better ROIC for both Airtel and Jio, with Macquarie pegging Airtel’s ROIC to be in the range of 10-16%, while Jio is expected to remain in the second place with a ROIC of 8-12%. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/lic-shares-surge-over-3-after-it-posts-a-five-fold-jump-in-q4-net-profit/articleshow/100495712.cms">LIC shares surge over 3% after it posts a five-fold jump in Q4 net profit</a> <a href="https://www.businessinsider.in/stock-market/news/adani-enterprises-titan-eicher-motors-tata-motors-reliance-and-other-big-companies-performance-in-nifty-50/articleshow/100474408.cms">Big boys drive Nifty50’s revenue and profit growth in FY23</a> <a href="https://www.businessinsider.in/business/corporates/news/gqg-partners-rajiv-jain-doubles-down-on-his-adani-bet/articleshow/100450041.cms">GQG Partners’ Rajiv Jain doubles down on his Adani bet</a>

Airtel, not Jio, to gain the most from Vodafone Idea's troubles

<ul><li>Sunil Mittal-led telco <keyword id="6354287" type="General" weightage="80" keywordseo="bharti-airtel" source="Orion">Bharti Airtel</keyword> today posted September-quarter results with its consolidated net profit growing 89% YoY to ₹2,145 crore. </li><li>Its average revenue per user rose 3.8% sequentially to ₹190, in line with analyst expectations. </li><li><keyword id="15491" type="General" weightage="100" keywordseo="airtel" source="Orion">Airtel</keyword> said that it intends to roll out 5G across all urban and key rural areas by March 2024. </li></ul> Sunil Mittal-led telecom operator Bharti Airtel on Monday announced its September-quarter results that saw consolidated net profit growing 89% year-on-year to ₹2,145 crore. On a sequential basis, its profit increased 33.5%. Airtel’s revenue from operations also increased 21.9% YoY to ₹34,527 crore. On a sequential basis, this is an increase of 5.2%. <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Particulars </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Q2 FY23 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Q1 FY23 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Q2 FY22 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Revenue </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹34,527 crore </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹32,805 crore </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹28,326 crore </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Net profit </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹2,145 crore </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹1,607 crore </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹1,134 crore </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">ARPU </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹190 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹183 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹153 </td></tr></tbody></table> Source: Company reports Airtel also reported a 24% YoY increase in the average revenue per user (ARPU) to ₹190 per month, thanks to feature phone users upgrading to smartphones, data monetisation and the telco’s focus on ‘quality’ customers. On a sequential basis, the telco’s ARPU increased 3.8%, in line with <a href="https://www.businessinsider.in/business/telecom/news/telecom-sector-to-ring-in-stability-in-q2-jio-and-airtel-expected-to-grow-stronger-vi-weaker/articleshow/94709309.cms">analyst expectations</a>. “The consistency of our execution is driven by the strength and resilience of our portfolio. Our B2B and Homes business continued their strong growth momentum while Mobile ARPU expanded to 190 on the back of premiumization and deep customer understanding,” said Gopal Vittal, Airtel CEO and MD. Overall, Airtel saw its voice traffic increase 5.1% YoY, while data usage rose 20.9%. Its total customer base increased 4.8% to 501 million across 16 countries that Airtel operates in. The telco’s subscriber base in India increased to 364 million in the September quarter, from 355 million a year ago. Its 4G subscriber base grew 17.8 million YoY, now accounting for 64% of its total subscribers. <cmsannotation type="cmsannotation" annotationid="‘There is a need for tariff correction’" comment="subhead" text="‘There is a need for tariff correction’">‘There is a need for tariff correction’</cmsannotation> Vittal also talked about the need for tariff hikes – something that his rival and former <keyword id="1553175" type="General" weightage="50" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword> CEO Ravinder Takkar has <a href="https://www.businessinsider.in/business/telecom/news/vi-betting-on-tariff-hike-as-it-lost-over-10-million-every-day-in-q1-fy23/articleshow/93348828.cms">also talked about</a>. “We remain concerned about the low return on capital employed (ROCE) that our business delivers due to pricing that is the lowest in the world. Given the large investments required to drive digital adoption in India we believe there is a need for tariff correction,” Vittal said. Airtel started rolling out 5G services earlier this month – dubbed Airtel 5G Plus, the services are currently live in eight cities in India. In its earnings release, the company said it will cover all urban and key rural areas across the country by March 2024. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/rbi-measures-controlled-inflation-but-challenges-remain-say-economists/articleshow/95201223.cms">RBI measures controlled inflation, but challenges remain say economists</a> <a href="https://www.businessinsider.in/finance/news/rupee-touches-83-01-against-dollar-amid-key-rate-hike-expectations-by-us-fed/articleshow/95204713.cms">Rupee touches 83.01 against dollar amid key rate hike expectations by US Fed</a> <a href="https://www.businessinsider.in/business/news/iit-madras-generates-rs-1081-cr-from-funding-and-revenue/articleshow/95200293.cms">IIT Madras generated ₹1,081 crore from govt projects and industry consultancy in 2021-22</a>

Bharti Airtel reports 89% YoY increase in Q2 net profit to ₹2,145 crore

<ul><li><keyword id="1553175" type="General" weightage="100" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword>’s shares zoomed on Monday after the government agreed to convert interest dues worth ₹16,133 crore into equity.</li><li>The equity conversion will make the government the largest shareholder of Vodafone Idea, with a 33% stake.</li><li>The government will remain a passive investor, leaving the Aditya Birla Group and Vodafone Plc as the primary decision makers of the telco.</li></ul>Vodafone Idea’s shares zoomed by 25% on Monday hitting an upper circuit, after the government agreed to convert interest dues worth ₹16,133 crore into equity. The move breathed a fresh lease of life into the telco’s attempts to raise funds to make payments to vendors and sign contracts with telecom equipment makers and roll out its 5G network. The share price of the troubled telco is back to its December 2022 levels, erasing the losses it saw this year, so far. <div type="image" title="Vodafone Idea share price April 2022 to Feb 2023." msid="97642952" hostid="261" caption="&amp;lt;p&amp;gt;Vodafone Idea share price in FY23&amp;lt;/p&amp;gt;"></div> “The total amount to be converted into equity shares is ₹16133,18,48,990. The Company has been directed to issue 1613,31,84,899 equity shares of the face value of ₹10 each at an issue price of ₹10 each,” Vodafone Idea said in an exchange filing on February 3. The equity conversion will pave the way for the government to become the largest shareholder of Vodafone Idea, long after the telecom reforms package was <a href="https://www.businessinsider.in/business/telecom/news/telecom-relief-package-airtel-vodafone-idea-get-four-year-moratorium-on-agr-dues/articleshow/86227218.cms">announced in September 2021</a>. As a result of this, the Aditya Birla Group’s stake will stand at 31.8%, while Vodafone Plc’s stake will be at 18.3%. This is a reduction from the existing stake of 75% held by the two promoters. <div type="Article" hostid="261" msid="86221662" title="Government picking up a stake in Vodafone Idea ‘might be a remedy worse than the disease’, say experts" mstype="2" mssubtype="0"></div> However, Aditya Birla Group, and Vodafone Plc, will continue to drive the company. Vodafone Idea’s management has already underlined that the government will neither take a seat on the company’s board, nor will it take decisions regarding the company’s operations. <cmsannotation type="cmsannotation" annotationid="Capital infusion key to Vodafone Idea’s future" comment="subhead" text="Capital infusion key to Vodafone Idea’s future">Capital infusion key to Vodafone Idea’s future</cmsannotation> Capital infusion remains a key to Vodafone Idea’s future, according to analysts. The telco has been struggling to retain subscribers while its rivals <keyword id="6354504" type="General" weightage="50" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword> and Bharti Airtel have seen both their subscriber numbers as well as the average revenue per user (ARPU) climb up each quarter since FY22. In the company’s post-result investor call in Q2, Vodafone Idea’s chief executive officer Akshaya Moondra had said, ‘’We are trying to close the funding quickly so that some of the backlog of vendor payments that we have can be addressed.” Vodafone Idea needs funds not just to fund its capital expenditure requirements, but also to service its debt. According to a Motilal Oswal report, its current earnings before interest, taxes, depreciation and amortization (EBITDA) of ₹8,700 crore in FY23 is inadequate to service debt. Capex is another piece of puzzle that the telco needs to solve. Vodafone Idea is yet to roll out its 5G offerings even as Jio and Airtel 5G services have been available in several parts of the country since October 2022. “The much-awaited capital raise remains critical to provide immediate liquidity and invest in the rollout of 5G and extending 4G infrastructure. Vodafone Idea acquired 5G spectrum in the 3300Mhz and 26GHz bands in the recent auction (September 2022) but unlike Reliance Jio and Bharti Airtel, it has not deployed the spectrum and remains significantly behind in 4G network rollout too,” said the Motilal Oswal report. It remains to be seen if the equity conversion gives investors enough confidence about the future of Vodafone Idea, and whether it will be enough for them to infuse funds that the telco needs desperately. <div type="javascript" title="Custom" contenttype="Text"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/adani-stocks-59844-crore-market-capitalisation-wiped-out-today-in-morning-trading/articleshow/97638076.cms">Adani group stocks continue to plummet – lose ₹59,844 crore in market capitalisation on Monday</a> <a href="https://www.businessinsider.in/business/corporates/news/adanis-stock-rout-can-impact-its-ability-to-raise-capital-or-refinance-debt-says-moodys/articleshow/97582403.cms">Adani’s stock rout can impact its ability to raise capital or refinance debt, says Moody’s</a> <a href="https://www.businessinsider.in/budget/news/budget-for-the-amrit-kaal-powered-by-capex-rooted-in-fiscal-consolidation/articleshow/97551916.cms">Budget for the Amrit Kaal: Powered by capex, rooted in fiscal consolidation</a>

Vodafone Idea shares hit 25% upper circuit after govt agrees to convert ₹16,133 cr dues into equity

<ul><li><keyword id="1553175" type="General" weightage="20" keywordseo="Vodafone-Idea" source="Orion">Vodafone Idea</keyword> reported a net loss of ₹7,596 crore in Q2, from ₹7,132 crore a year ago. </li><li>The telco also lost six million subscribers during the quarter, but its average revenue per user (ARPU) improved to ₹131 from ₹128 in the previous quarter. </li><li>Vi’s CEO Akshaya Moondra said the company is engaging with lenders and investors to raise funds for network expansion and 5G rollout. </li></ul>Vodafone Idea (Vi), India’s third largest telecom company, today reported a net loss of ₹7,596 crore in Q2, from ₹7,132 crore a year ago. The telco’s revenues during the quarter increased 12.9% year-on-year to ₹10,611 crore. However, Vi is now earning more from its customers. Its average revenue per user (ARPU) has increased both sequentially and on-year basis. At the same time, it has not been able to stem subscriber loss. In the September quarter, the telco lost 6 million subscribers, and its subscriber base stood at 234.4 million as at September 30, 2022. Vi’s ARPU edged up to ₹131 during Q2, from ₹128 in the previous quarter, and ₹109 in the same period last year. On a positive note, the telco reported a growth in the 4G subscriber base during Q2, with total 4G subscribers at 120.6 million at the end of the quarter, up from 119 million in the previous quarter. For comparison, in the same period previous year, Vi’s 4G subscriber base stood at 116.2 million. However, the telco’s pace of 4G subscriber addition has slowed down in Q2 this year – Vi added 1.5 million 4G subscribers this quarter, as against 3.3 million in the same period last year. Its net worth stood at a negative ₹76,417 crore, worsening from negative ₹69,261 crore in the previous quarter and negative ₹52,686 crore a year ago. Here’s Vodafone Idea’s Q2 in numbers: <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Particulars </td><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q2 FY23 </td><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q1 FY23 </td><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q2 FY22 </td></tr><tr><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Revenue </td><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹10,611 crore </td><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹10,407 crore </td><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹9,402 crore </td></tr><tr><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Net profit </td><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-₹7,596 crore </td><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-₹7,297 crore </td><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-₹7,132 crore </td></tr><tr><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ARPU </td><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹131 </td><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹128 </td><td style="border-left:solid #000000 0.99609pt;border-right:solid #000000 0.99609pt;border-bottom:solid #000000 0.99609pt;border-top:solid #000000 0.99609pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹109 </td></tr></tbody></table> Source: Company reports <cmsannotation type="cmsannotation" annotationid="Engaging with lenders and investors for 5G rollout, says Vodafone Idea" comment="subhead" text="Engaging with lenders and investors for 5G rollout, says Vodafone Idea">Engaging with lenders and investors for 5G rollout, says Vodafone Idea</cmsannotation> While its rivals <keyword id="6354504" type="General" weightage="80" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword> and Bharti Airtel have started rolling out 5G services in select parts of the country, Vi says it is in talks with stakeholders to get its 5G rollout going. “We continue to remain engaged with our lenders and investors for further fund raising to make required investments for network expansion and 5G rollout,” said Akshaya Moondra, CEO, Vi. Vi acquired 5G spectrum worth ₹18,799 crore, payable in 20 annual installments. Its rivals Airtel and Reliance Jio<a href="https://www.businessinsider.in/business/telecom/news/jio-vs-airtel-which-one-will-offer-faster-and-more-reliable-5g-services/articleshow/93516727.cms"> acquired</a> spectrum worth ₹43,084 crore and ₹88,078 crore, respectively. <cmsannotation type="cmsannotation" annotationid="Subscriber churn worsens, but engagement sees an uptick" comment="subhead" text="Subscriber churn worsens, but engagement sees an uptick">Subscriber churn worsens, but engagement sees an uptick</cmsannotation> Subscriber churn, which refers to the number of subscribers which have stopped paying for services, worsened during the quarter to 4.3%. For context, it stood at 2.9% in the same period last year, and 3.5% in the previous quarter. On the other hand, customer engagement edged up during the September quarter. Data usage stood at 15GB per month (per user) in Q2, up from 14.5GB a year ago. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/september-earnings-on-track-but-its-time-to-tone-down-optimism-says-kotak-institutional-equities/articleshow/95272073.cms">September earnings on track, but it’s time to tone down optimism says Kotak Institutional Equities</a> <a href="https://www.businessinsider.in/business/corporates/news/hdfc-reports-18-year-on-year-rise-in-q2-net-profit-to-4454-crore/articleshow/95279744.cms">HDFC reports 18% year-on-year rise in Q2 net profit to ₹4,454 crore</a> <a href="https://www.businessinsider.in/finance/news/interest-rates-on-deposits-need-to-go-up-say-experts-as-share-of-fds-in-household-financial-assets-drops/articleshow/95275488.cms">Interest rates on deposits need to go up, say experts, as share of FDs in household financial assets drops</a>

Vodafone Idea’s Q2 loss widens to ₹7,596 crore

<ul><li>Earnings of Indian telecom companies are headed for a moderation in Q4 amidst a lack of significant tariff hikes. </li><li>Analysts expect a rise in data usage and users upgrading to 4G/5G to lift the average revenue per user (ARPU) as well as margins. </li><li><keyword id="2003276" type="General" weightage="80" keywordseo="jio" source="Orion">Jio</keyword> and <keyword id="15491" type="General" weightage="80" keywordseo="airtel" source="Orion">Airtel</keyword>’s focus on aggressive expansion of 5G coverage across the country is also expected to keep their capital expenditure elevated.</li></ul>Indian telecom companies are likely to report a moderation in Q4 earnings amidst a lack of significant tariff hikes. An expected slowdown in market share gains of leading telcos Reliance Jio and Bharti Airtel at the expense of <keyword id="1553175" type="General" weightage="80" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword> is also expected to weigh on the quarterly results. Analysts, however, expect an increase in data usage and users upgrading to 4G/5G to boost the average revenue per user (ARPU) as well as margins. According to a report by Motilal Oswal, Jio and Airtel are expected to report a 4-5% sequential growth in data usage in Q4, while Vodafone Idea is expected to see a 1% increase. “The industry continues to see outsized churn in the lower ARPU segments given the sharp hike in entry-level prepaid tariff in the last 18-24 months. Hence, subscriber (subs) addition is likely to remain muted,” said a report by JM Financial referring to the increase in base tariffs, like Airtel’s ₹99 plan that was increased to ₹155. Analysts expect Jio to lead in terms of revenue growth at 13.6% year-on-year, followed closely by Airtel at 12.9%. Vodafone Idea is expected to come in third at 2.6%. Overall, though, analysts at JM Financial have Airtel as their top pick. “Bharti is the biggest beneficiary of higher tariffs given the sticky and premium quality of its subs, ensuring that tariff hikes flow through to ARPU.” <cmsannotation type="cmsannotation" annotationid="Airtel to extend its lead over rivals in ARPU" comment="subhead" text="Airtel to extend its lead over rivals in ARPU">Airtel to extend its lead over rivals in ARPU</cmsannotation> While Jio has kept its tariffs unchanged, Airtel has hiked the price of its base plan of ₹99 to ₹155 in all the 22 circles, after testing the waters in Q3. This will help the telco increase its ARPU a tad higher than its peers – analysts at Motilal Oswal expect Airtel’s ARPU to increase to ₹197 from ₹193. Jio and Vodafone Idea are expected to report a ₹2 increase in their ARPUs to ₹179 and ₹137, respectively. In addition to this, the brokerage also expects SIM consolidation – wherein subscribers dump extra SIM cards and retain their primary one – to aid ARPU growth. Once again, Airtel and Jio could emerge as the top gainers with a 2-3% sequential growth while it is expected to be flat for Vodafone Idea. <cmsannotation type="cmsannotation" annotationid="Jio and Airtel’s unlimited 5G plans to aid market share gains" comment="subhead" text="Jio and Airtel’s unlimited 5G plans to aid market share gains">Jio and Airtel’s unlimited 5G plans to aid market share gains</cmsannotation> Adding to the woes of Vodafone Idea, Jio and Airtel’s unlimited 5G plans, starting at ₹239 per month, are expected to help the latter two gain market share at the expense of the former. The analyst consensus is that Jio and Airtel could gain between 1-2% subscribers during the quarter, while Vodafone Idea is expected to lose 1% of its subscribers. That said, the subscriber loss for Vodafone Idea could be lower in Q4 on a sequential basis, at 3 million versus 5-6 million in the previous two quarters. <cmsannotation type="cmsannotation" annotationid="Capital expenditure to remain elevated due to 5G rollout" comment="subhead" text="Capital expenditure to remain elevated due to 5G rollout">Capital expenditure to remain elevated due to 5G rollout</cmsannotation> Jio and Airtel’s focus on aggressive expansion of 5G coverage across the country will result in high capital expenditure outlays, according to brokerages. While <keyword id="6668253" type="General" weightage="20" keywordseo="jio-5g" source="Orion">Jio 5G</keyword> is currently available in over 400 cities across India, Airtel has taken a lead and expanded to over 500 cities. For context, Airtel and Jio had 5G coverage in 66 and 70 cities respectively in December 2022. “We expect their capex to remain elevated in 4QFY23 and may increase further from previous quarters,” Motilal Oswal said. While Jio targets pan-India 5G coverage by December 2023, Airtel is aiming to cover all major cities by the end of March 2023. All in all, Jio’s capex outlay for 5G rollout, including spectrum costs, is ₹2 lakh crore. Airtel, on the other hand, has an outlay of ₹75,000 crore. With the pace of rollout expected to increase from here on, the capex is expected to increase at the same pace. Vodafone Idea’s 5G rollout will depend on its fundraising, the details of which are unclear at the moment. Analysts at ICICI Securities expect Airtel to call for the second tranche of payment for its ₹21,000 crore rights issue to fund its 5G capex – the telco had announced it back in October 2021. Overall, the gap between the leaders – Jio and Airtel, and the laggard – Vodafone Idea, is<a href="https://www.businessinsider.in/business/telecom/news/increased-competition-delayed-tariff-hikes-could-effectively-lead-to-a-jio-airtel-duopoly/articleshow/99065537.cms"> expected to continue to widen in Q4</a> in all critical aspects like revenue, profit, ARPU and subscribers. The lack of a fundraise too has delayed Vodafone Idea’s 5G rollout, which is only making matters worse for the telco. SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/increased-competition-delayed-tariff-hikes-could-effectively-lead-to-a-jio-airtel-duopoly/articleshow/99065537.cms">Increased competition, delayed tariff hikes could effectively lead to a Jio-Airtel duopoly</a> <a href="https://www.businessinsider.in/finance/news/rbi-revises-indias-fy24-growth-outlook-expects-softer-inflation-on-the-back-of-lower-commodity-prices/articleshow/99290005.cms">RBI revises India’s FY24 growth outlook, expects softer inflation on the back of lower commodity prices</a> <a href="https://www.businessinsider.in/finance/news/rbis-monetary-policy-committee-keeps-repo-rate-unchanged-at-6-5/articleshow/99284354.cms">RBI’s Monetary Policy Committee keeps repo rate unchanged at 6.5%, for now</a>

Telecom companies’ Q4 revenue likely to moderate due to lack of significant tariff hikes

<ul><li><keyword id="1553175" type="General" weightage="100" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword> today told analysts that another round of tariff hikes is likely before the end of 2022.</li><li>The telco also needs a tariff hike boost more than its rivals Airtel and Jio do, as it struggles to retain subscribers and its current ARPU levels are much lower than those of its rivals.</li><li>The telco lost 15 million subscribers and the gap between its total and active subscribers is increasing too. </li></ul>India’s third largest telecom provider Vodafone Idea today said that another tariff hike is possible before the end of 2022 as it looks for a margin boost to improve its liquidity. In an analyst concall today, Vodafone Idea’s CEO <keyword id="5188531" type="General" weightage="50" keywordseo="ravinder-takkar" source="Orion">Ravinder Takkar</keyword> said the “time is right to think about a further price hike”. “Tariff hike environment is right and we won’t hesitate to take leadership in hiking prices,” Takkar said. “Customers have taken November tariff hikes very well. Almost all of it has flown to our ARPU numbers. Another tariff hike is possible by the end of the year,” he added further, noting that average revenue per user or ARPU has increased consistently from ₹104 a year ago to ₹128 now. Even as it is earning more from its customers, it has lost 15 million subscribers during the same period. While its revenue grew nearly 14% to ₹10,407 crore in the first quarter as compared to last year, it posted a massive net loss of ₹7,297 crore. The gap between its total and active subscribers is also widening, suggesting that more users than before do not have an active plan. <cmsannotation type="cmsannotation" annotationid="Subscriber churn remains a big problem – Vi is betting on value added services to improve stickiness" comment="subhead" text="Subscriber churn remains a big problem – Vi is betting on value added services to improve stickiness">Subscriber churn remains a big problem – Vi is betting on value added services to improve stickiness</cmsannotation> For now, Vodafone Idea is betting on its <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-partners-with-nazara-tech-to-foray-into-mobile-gaming/articleshow/90198674.cms">partnership with Rakesh Jhunjhunwala-backed Nazara Tech for online gaming</a>, and other streaming services like Netflix, Amazon Prime Video, Hotstar, Zee5 and others to maintain subscriber stickiness. <div type="image" title="Vodafone Idea subscribers Q1 FY22 to Q1 FY23." msid="93348841" hostid="261" caption="&amp;lt;p&amp;gt;Vodafone Idea subscribers&amp;lt;/p&amp;gt;"></div> The only positive, though, is that the number of 4G subscribers have increased, from 113 million a year ago to 119 million now. Still, this is less than half of Vodafone Idea’s total subscriber base. <div type="Article" hostid="261" msid="93312184" title="5G services might kickoff in October but your mobile bills could rise sooner" mstype="2" mssubtype="0"></div> <cmsannotation type="cmsannotation" annotationid="Consumer engagement is falling, too" comment="subhead" text="Consumer engagement is falling, too">Consumer engagement is falling, too</cmsannotation> What should also concern Vodafone Idea is consumer engagement on its platform, which has declined both in terms of voice as well as data consumption. <div type="image" title="Vodafone Idea data voice arpu Q1 FY22 to Q1 FY23." msid="93348873" hostid="261" caption="&amp;lt;p&amp;gt;Vodafone Idea&amp;#39;s consumer engagement metrics&amp;lt;/p&amp;gt;"></div> <cmsannotation type="cmsannotation" annotationid="5G will likely be at a premium to 4G, but rollout unknown" comment="subhead" text="5G will likely be at a premium to 4G, but rollout unknown">5G will likely be at a premium to 4G, but rollout unknown</cmsannotation> Thanks to its liquidity concerns, Vodafone Idea’s bids in the recently-concluded <a href="https://www.businessinsider.in/business/telecom/news/heres-how-much-mobile-bills-can-increase-from-5g-network-service/articleshow/93312184.cms">5G spectrum auctions</a> were 2.3x and 4.6x lower than its rivals Airtel and <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-posts-a-moderate-5-increase-in-profits-in-q1-fy23-adds-10-million-new-subscribers/articleshow/93058640.cms">Reliance Jio</a>, respectively. To make matters worse, the company has not committed to any particular launch date for 5G services, yet. Its rivals Airtel and Reliance Jio are <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-5g-services-could-be-launched-on-august-15/articleshow/93341992.cms">likely to launch</a> their services in this very month. Vodafone Idea’s financial metrics at a glance: <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Particulars </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Q1 FY23 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Q4 FY22 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Q1 FY22 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Revenue </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹10,407 crore </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹10,229 crore </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹9,144 crore </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Net profit </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">-₹7,297 crore </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">-₹6,561 crore </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">-₹7,319 crore </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Net margin </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">-70% </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">-64% </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">-80% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">ARPU </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹128 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹124 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹104 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> Source: Company reports The telco also lost over $10 million a day during Q1 FY23 – largely due to finance costs. Its limited resources have forced the telco to focus investments in its core circles and reduce capex as much as possible. This is evident from the fact that Vodafone Idea has undertaken refarming 2G and 3G spectrum to 4G to minimize costs and enhance its capacities. Takkar also said he hopes 5G will be at a premium to 4G, but that would also likely mean users will get higher data allowances to make up for it. While the company underlined that the ₹4,940 crore equity infusion by its promoters shows they are confident about its prospects, it refrained from revealing any information about future fundraising plans. <div type="javascript" title="Custom" contenttype=""><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/nifty-sensex-fall-after-a-6-session-streak-amid-china-taiwan-crisis/articleshow/93341328.cms">Markets snap their six-day winning streak with a marginal fall</a> <a href="https://www.businessinsider.in/finance/news/rbi-and-us-fed-policies-are-more-similar-than-you-think/articleshow/93329850.cms">RBI and US Fed policies are more similar than you think</a> <a href="https://www.businessinsider.in/business/telecom/news/heres-how-much-mobile-bills-can-increase-from-5g-network-service/articleshow/93312184.cms">5G services might kickoff in October but your mobile bills could rise sooner</a>

VI betting on tariff hike as it lost over $10 million every day in Q1 FY23

<ul><li>Reliance <keyword id="2003276" type="General" weightage="80" keywordseo="jio" source="Orion">Jio</keyword> and Bharti <keyword id="15491" type="General" weightage="80" keywordseo="airtel" source="Orion">Airtel</keyword> are waiting it out and getting their users hooked onto 5G before hiking tariffs. </li><li>Elevated subscriber churn has also acted as a barrier against <keyword id="891186" type="General" weightage="20" keywordseo="tariff-hikes" source="Orion">tariff hikes</keyword>, according to analysts. </li><li>Enhancing 5G utilization also lets Jio and Airtel grab market share from <keyword id="1553175" type="General" weightage="80" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword>, which is yet to launch its 5G services. </li></ul>There is a broad consensus amongst both telecom companies’ management and analysts that the sector needs another round of tariff hikes, but <keyword id="6383126" type="General" weightage="100" keywordseo="telcos" source="Orion">telcos</keyword> seem shy of blinking first this time around amidst a rise in subscriber churn. While analysts have noted multiple times that tariff hikes are imminent, telecom companies are yet to bite the bullet. Bharti Airtel, the second largest telco, had said in Q2 that there is a<a href="https://www.businessinsider.in/business/telecom/news/bharti-airtel-reports-89-yoy-increase-in-q2-net-profit-to-2145-crore/articleshow/95207348.cms"> “need for tariff correction”</a>, while Vodafone Idea said during its Q1 investor call that a<a href="https://www.businessinsider.in/business/telecom/news/vi-betting-on-tariff-hike-as-it-lost-over-10-million-every-day-in-q1-fy23/articleshow/93348828.cms"> tariff hike is necessary</a> before the end of 2022. Curiously enough, neither telco touched upon tariff hikes in their respective Q3 earnings. Global brokerage Jefferies had noted that it expects Bharti Airtel and Reliance Jio to hike tariffs by 10% each in Q4 of FY23, FY24 and FY25. So far, however, tariff hikes have not materialized and telcos don’t seem to be in any major rush going by the lack of commentary in this regard in their latest earning calls. <cmsannotation type="cmsannotation" annotationid="Telcos want to get users hooked onto 5G" comment="subhead" text="Telcos want to get users hooked onto 5G">Telcos want to get users hooked onto 5G</cmsannotation> The high cost associated with the acquisition of 5G spectrum and the rollout of 5G services means that tariff hikes remain a key trigger for telecom companies. However, for now, Airtel and Jio are focusing on expanding the availability of their 5G networks and getting users hooked onto the higher data speeds before hiking tariffs. According to the analysts Jefferies, Jio and Airtel are also grabbing market share at the expense of Vodafone Idea, which is struggling to roll out its 5G services due to a fund crunch. “We believe there is greater uncertainty on tariff hikes in the near term given that large capacity creation with 5G will shift focus on boosting utilization. Moreover, focus on market share will rise amidst moderating data subscriber growth and Vodafone Idea’s worsening situation,” said a Jefferies report. <div type="image" title="Telecom market share April-Dec 2Jan-22_31.13_35.49_23.15 Feb-22_31.37_35.28_23.09 Mar-22_31.55_35.37_22.83 Apr-22_31.61_35.5_22.68 May-22_31.62_35.69_22.56 Jun-22_31.63_36_22.37 Jul-22_31.66_36.23_22.22 Aug-22_31.." msid="98123501" hostid="261" sizebytes="30376" caption="&amp;lt;p&amp;gt;Telecom market share FY23&amp;lt;/p&amp;gt;"></div> Telcos are also wary of the elevated subscriber churn, and a tariff hike at this point could worsen it. “We are not baking in any tariff hikes at all in the calendar year 2023. We believe it will be difficult for operators to do another 20% hike, as subscribers found it difficult to absorb the last 20% hikes, leading to heightened churn,” JP Morgan said in a note. However, analysts at Jefferies were relatively less bearish on the prospect of tariff hikes, saying that we could see one round of hikes by March 2023. Going forward, the brokerage believes that telcos could resort to hiking 4G tariffs and driving up usage of 5G services by offering larger data bundles at a lower cost per GB. “While 5G is unlikely to drive up ARPUs without tariff hikes, it will help Bharti Airtel and Reliance Jio gain market share from Vodafone Idea," JP Morgan added. For context, Reliance Jio’s 5G services are available in 277 cities across the country, while Airtel’s 5G services are available in 133 cities. Vodafone Idea, on the other hand, is yet to officially roll out its 5G services. Going forward, the direction telcos choose in monetising 5G will be key in determining the timing and quantum of tariff hikes. <cmsannotation type="cmsannotation" annotationid="Lack of tariff hikes results in marginal uptick in ARPU" comment="subhead" text="Lack of tariff hikes results in marginal uptick in ARPU">Lack of tariff hikes results in marginal uptick in ARPU</cmsannotation> The lack of tariff hikes has also resulted in only a marginal uptick in the average revenue per user (ARPU) of the three telcos. While Jio’s ARPU <a href="https://www.businessinsider.in/business/telecom/news/reliance-jios-net-profit-up-3-2-sequentially-at-4881-crore-in-q3-on-better-subscriber-mix/articleshow/97179677.cms">increased 1.8%</a> sequentially, Vodafone Idea <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-q3-net-loss-widens-to-7990-crore-average-revenue-per-user-edges-up-to-135/articleshow/97939836.cms">reported</a> a 3% increase. Airtel, on the other hand, <a href="https://www.businessinsider.in/business/telecom/news/bharti-airtel-q3-net-profit-jumps-91-to-1588-crore-misses-estimates/articleshow/97698481.cms">reported</a> a 1.6% increase due to premiumisation. The increase in 4G usage also helped Jio and Airtel post a moderate uptick in their revenue – while Jio’s revenue increased marginally by 2.4% sequentially in Q3, Airtel reported a 3.7% topline growth. According to the analysts at JM Financial, this revenue uptick was due to an increase in 4G subscribers – while Jio’s subscriber base grew by 4.55 million, Airtel reported an increase of 3.39 million during the December quarter. Vodafone Idea, on the other hand, reported a decline of 7.81 million subscribers during this period. However, the analysts at Jefferies believe that the government picking up a 33% stake in Vodafone Idea has improved the outlook for tariff hikes in the longer term. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/indian-banks-dream-run-could-soon-be-over-as-deposit-rates-start-catching-up-to-lending-rates/articleshow/98117219.cms">Indian banks’ dream run could soon be over as deposit rates start catching up to lending rates</a> <a href="https://www.businessinsider.in/tech/news/microsoft-bing-chatgpt-gives-death-threats-tries-to-break-a-marriage-and-more/articleshow/98091746.cms">Skynet, anyone? Microsoft’s Bing AI gives death threats, tries to break a marriage and more</a> <a href="https://www.businessinsider.in/stock-market/news/adani-group-stocks-meltdown-continues-on-monday/articleshow/98084715.cms">Adani group stocks meltdown continues on Monday – Adani Enterprises sees the biggest decline</a>

Wary of churn, telcos want to get users hooked onto 5G before hiking tariffs

<ul><li><keyword id="1553175" type="General" weightage="100" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword>’s Ravindar Takkar wants to triple the money that the telco makes from its users, over the next three to five years. </li><li>However, the telco is the worst-placed in the Indian telecom industry in this regard. </li><li>Even in its heyday, Vodafone India managed an ARPU of just ₹205, considerably lower than Takkar’s ambitious target. </li><li>It remains to be seen if the advent of 5G will be the lifeline that Vodafone Idea needs. </li></ul>For a brief, very brief time Vodafone Idea was the biggest telecom player in India - right after the merger. But Jio did not allow them to enjoy the spot as its entry changed the rules of the game – effectively taking away the margins and earnings of the entire sector along with subscribers. Before 2016, 1GB of 3G data cost as much as ₹400. Reliance Jio brought it down by nearly 84 times — as 1GB 4G data at an effective price of ₹4.75, along with unlimited voice calls and SMS. Six years since, Vodafone Idea has fallen into a distant third player in terms of subscriber numbers and its debt and liabilities too swelled. In time, the competitive intensity has also cooled and now it wants to get back into the game by improving earnings from its customers. Vodafone Idea’s managing director and chief executive officer, Ravindar Takkar, <a href="https://www.livemint.com/industry/telecom/vi-won-t-hesitate-to-lead-next-round-of-tariff-hikes-11654016903997.html">says</a> he wants to make thrice as much money from his users, than he does today. "All telecom operators want to increase their ARPUs, and Vodafone Idea needs it more than others. It can do this by increasing tariffs or data usage,” Mahesh Uppal, telecom analyst and director, Com First India told Business Insider India. Vodafone Idea’s current average revenue per user (ARPU) stands at ₹124, and Takkar wants this to increase to ₹350-400 in the next three to five years. Vodafone Idea is not alone in wanting to increase tariffs, which gives it the room it needs to try to grow its revenue without losing subscribers. “There was a time when some operators were not keen to raise tariffs. That has changed, and there is no longer an unwillingness to increase rates,” said Uppal. <div type="Article" hostid="261" msid="91906347" title="Vodafone Idea will have a solid ‘turnaround’ war chest if it clinches the Amazon deal" mstype="2" mssubtype="0"></div> For comparison, in its heydays, Vodafone India’s ARPU, just before the launch of Jio, was at ₹205. Its significant other, Idea, had an ARPU of 144. Airtel, the strongest of the lot even today, had an ARPU of ₹194 in the same period. Fast forward to today, this is where the three telcos stand when it comes to the money they make from each user. Also, Jio’s advent also coincided with 4G services whose network and spectrum costs are higher than that of 3G, thinning their overall margins. <div type="image" title="Airtel Jio Vodafone Idea ARPU Q4 FY22." msid="91941626" hostid="261" caption="&amp;lt;p&amp;gt;Vodafone Idea&amp;#39;s average revenue per user is significantly behind Airtel and Jio&amp;#39;s&amp;lt;/p&amp;gt;"></div> <cmsannotation type="cmsannotation" annotationid="Vodafone Idea needs more than hope and prayers to increase its revenue" comment="subhead" text="Vodafone Idea needs more than hope and prayers to increase its revenue">Vodafone Idea needs more than hope and prayers to increase its revenue</cmsannotation> Vodafone Idea has been <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-will-raise-up-to-25000-crore-by-selling-shares-and-taking-loans/articleshow/77933604.cms">looking to raise ₹25,000 crore since 2020</a>. It managed to raise <a href="https://www.businessinsider.in/business/news/vodafone-raises-stake-to-47-61-in-vodafone-idea-through-subsidiary-prime-metals/articleshow/90639253.cms#:~:text=Vodafone%20raises%20stake%20to%2047.61%25%20in%20Vodafone%20Idea%20through%20subsidiary%20Prime%20Metals,-Advertisement&amp;text=British%20telecom%20major%20Vodafone%20has,regulatory%20filing%20said%20on%20Monday.">₹4,500 crore</a> earlier in April this year, and <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-will-have-a-solid-turnaround-war-chest-if-it-clinches-the-amazon-deal/articleshow/91906347.cms">new reports</a> suggest that it could receive another ₹20,000 crore soon. But the telco needs more than that, and hope and prayers to increase revenue. One of the rays of hope on offer could be 5G services. 5G spectrum auctions are expected to take place in the next few weeks, and if the telco manages to raise ₹20,000 crore in time, it could be used towards scooping up the necessary 5G spectrum. Vodafone Idea has previously <a href="https://www.businessinsider.in/business/telecom/news/vodafone-ideas-5g-trials-achieve-speeds-in-excess-of-3-7-gbps-in-pune/articleshow/86360103.cms">demonstrated</a> its 5G-readiness, but proper network testing is only possible after the spectrum auctions take place. <cmsannotation type="cmsannotation" annotationid="Two-faced challenge at Vodafone Idea’s doors" comment="subhead" text="Two-faced challenge at Vodafone Idea’s doors">Two-faced challenge at Vodafone Idea’s doors</cmsannotation> Despite Takkar’s ambitious target to reach ₹350-400 ARPU levels, Vodafone Idea has its task cut out. It faces not one, but two challenges wrapped in the same cloth – subscribers. For a long time now, Vodafone Idea has been losing millions of subscribers every month. In fact, since the beginning of 2020, Vodafone Idea has lost 72 million subscribers. Its rivals, Airtel and Reliance Jio, have made merry, splitting these subscribers amongst themselves. <div type="image" title="Airtel Jio Vodafone Idea subscriber chart Jan 2020 to March 22." msid="91941644" hostid="261" caption="&amp;lt;p&amp;gt;Net addition of subscribers since 2020&amp;lt;/p&amp;gt;"></div> Despite its attempts, Vodafone Idea has been unable to stem the loss of subscribers. Out of the 27 months since January 2020, the telco has lost subscribers in 25 months. <div type="Article" hostid="261" msid="91757795" title="Jio, Airtel and Vodafone Idea are reportedly planning on increasing prices again" mstype="2" mssubtype="0"></div> To make matters worse, Vodafone Idea also has the worst 4G subscriber rate – less than half of its subscribers use 4G. <div type="image" title="Airtel Reliance Jio Vodafone Idea total subscribers vs 4G subscribers March 2022." msid="91941658" hostid="261" caption="&amp;lt;p&amp;gt;Vodafone Idea has the lowest rate of 4G subscribers&amp;lt;/p&amp;gt;"></div> A 4G subscriber is more valuable than a 2G or 3G subscriber, since 4G plans cost more. However, in the case of Jio, this does not directly reflect in its ARPU numbers since it also offers ultra-low-cost 4G plans to its JioPhone users. To overcome this challenge and to substantially increase its revenue, Vodafone Idea not only has to stem the loss of subscribers, but also convert more of them to 4G from the legacy 2G network. SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-will-have-a-solid-turnaround-war-chest-if-it-clinches-the-amazon-deal/articleshow/91906347.cms">Vodafone Idea will have a solid ‘turnaround’ war chest if it clinches the Amazon deal</a> <a href="https://www.businessinsider.in/business/telecom/news/jio-airtel-and-vodafone-idea-are-reportedly-planning-on-increasing-prices-again-in-end-of-year/articleshow/91757795.cms">Jio, Airtel and Vodafone Idea are reportedly planning on increasing prices again</a> <a href="https://www.businessinsider.in/business/telecom/news/mukesh-ambanis-jio-lags-behind-airtel-which-is-the-top-telecom-brand-in-india/articleshow/91935279.cms">Mukesh Ambani's Jio lags behind Airtel which is the top telecom brand in India</a>

Vodafone Idea wants to triple the money it makes from its users, but it will take more than hope and prayers to achieve it

Reliance Industries earnings today; HUL, ICICI Bank and Vodafone Idea also in focus on January 21

<ul><li>Shares of <keyword id="1553175" type="COMPANY" weightage="20" keywordseo="Vodafone-Idea">Vodafone Idea</keyword> opened 10% lower after reports widening of net loss and inability to generate cash flow and raise funds.</li><li>The company has reported a net loss of ₹7,022 crore in <keyword id="141295" type="PERSON" weightage="20" keywordseo="March-quarter">March quarter</keyword> 2021 as against net loss of ₹4,532 crore in December quarter 2020.</li><li>The <keyword id="6354776" type="COMPANY" weightage="20" keywordseo="Telecom">telecom</keyword> operator has a piled up net debt of ₹1.7 lakh crore</li></ul>Shares of Vodafone Idea tanked over 15% at 9:23 a.m on July 1 to ₹8.50, as the <keyword id="6359480" type="ORGANIZATION" weightage="20" keywordseo="Aditya-Birla">Aditya Birla</keyword> Group-backed telecom operator confessed its struggles to run operations amid its inability to raise funds in its March quarter <keyword id="6402403" type="UNKNOWN" weightage="20" keywordseo="results">results</keyword>. Shares of the company were trading at ₹9.30, down 6.5% at 10:06 a.m. The company highlighted its concerns related to the inability to raise funds and clear piled up debt, which questioned their journey forward as a firm. Vodafone Idea reported a net loss of ₹7,022 crore in the March quarter along with a net debt of ₹1.7 lakh crore. The company stated that its “financial performance has impacted its ability to generate the cash flow that it needs to settle/refinance its liabilities and guarantees as they fall due, which along with its financial condition is resulting in material uncertainty that casts significant doubt on the Company’s ability to make the payments mentioned therein and continue as a going concern.” Moreover, the company has witnessed a major decline in average revenue per user (ARPU), which fell to ₹107 in the January-March quarter, a decline of nearly 12% from the preceding quarter. Analysts had expected the company to report losses narrowing and reduction in average revenue per user (ARPU) considering the end to interconnect usage charges (IUC) regime. Gross revenue of the company has also declined to ₹9,607 crore in March quarter as compared to ₹10,894 crore in the December quarter. The company has attributed the fall in revenues and ARPU to removal of IUC. The IUC is a charge made by one telecom operator to another when its customers make outgoing calls to the other operator. On the other hand, the company saw a marginal rise in 4G subscriber base to 11.39 crore as compared to 10.97 crore in the preceding quarter. EBITDA numbers have gone up to ₹4,408 crore in the March quarter, a rise of nearly 3% from the previous quarter. EBITDA margin has improved at 45.9% from 39.3% in the December quarter. EBITDA is <keyword id="6357061" type="SPONSORED" weightage="20" keywordseo="earnings">earnings</keyword> before interest, taxes, depreciation and amortisation. As per the Telecom Regulatory Authority of India (<keyword id="6356988" type="DEFINITION" weightage="20" keywordseo="trai">TRAI</keyword>), Vodafone Idea had the best voice quality in the country for 6 months consecutively between November 2020 and April 2021. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/thousands-of-indias-transgenders-are-missing-vaccines-due-to-fear-follies-and-lack-of-ids/articleshow/83990511.cms">Thousands of India's transgenders are missing vaccines due to fear, follies and lack of IDs</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/space/news/asteroids-contain-metals-worth-quintillions-of-dollars-but-mining-them-wont-necessarily-make-your-richer-than-bezos-or-musk/articleshow/83989878.cms">Asteroids contain metals worth quintillions of dollars — but mining them won’t necessarily make your richer than Bezos or Musk</a>

Vodafone Idea shares in deep red as an uncertain future looms

<ul><li>All the red signs are blaring at <keyword id="1553175" type="General" weightage="20" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword>, but the telco says that a second tariff hike could be coming this year. </li><li>The company’s CEO Ravinder Takkar noted that it won’t wait for two years to raise tariffs again. </li><li>Vodafone Idea reported ballooning losses, declining revenue, subscriber and ARPU numbers during the December 2020 quarter. </li></ul>Merely a few weeks after a tariff hike, Vodafone Idea says another one could be coming soon as the struggling telco looks to battle dwindling subscribers and dipping revenue. “We would expect that it’s possible that there could be another price hike in 2022, but certainly at some point the price hike will take place,” said Vodafone Idea’s chief executive officer Ravinder Takkar during the company’s earnings call. Interestingly, Takkar <a href="https://www.businessinsider.in/business/telecom/news/there-is-a-silver-lining-in-vodafone-ideas-dark-numbers/articleshow/89086056.cms">said</a> that the drop in subscribers was due to the <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-hikes-tariffs-by-up-to-500-for-its-popular-plans/articleshow/87864183.cms">tariff hike</a> in November and SIM consolidation. He also said there is “no concern regarding the 4G customer addition pace and the drop in subscribers.” To recall, <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-hikes-tariffs-by-up-to-500-for-its-popular-plans/articleshow/87864183.cms">Vodafone Idea hiked tariffs</a> by up to ₹500, or 25%, across all of its popular plans. While the hike is yet to reflect in the company’s average revenue per user, it is still languishing at ₹115, while its rivals Airtel and Jio are both sailing above ₹150 levels. “The last one was almost 2 years earlier, which I believe is a bit long. We certainly would expect less than two years, but in 2022 we will have to see how quickly these prices get embedded. Probably, it could be 2023 as well,” said Takkar, laying down the rationale for the tariff hike. <cmsannotation type="cmsannotation" annotationid="Revenue, ARPU, subscribers down, losses widen" comment="subhead" text="Revenue, ARPU, subscribers down, losses widen">Revenue, ARPU, subscribers down, losses widen</cmsannotation> All the alarms have gone off and the sirens are blaring at Vodafone Idea as the telco continued to hemorrhage subscribers in the December quarter. Revenue and average revenue per user (ARPU) were down, too, and losses continued to mount. <cmsannotation type="cmsannotation" annotationid="Vodafone Idea’s quarter in numbers" comment="subhead" text="Vodafone Idea’s quarter in numbers">Vodafone Idea’s quarter in numbers</cmsannotation> <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Particulars </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Dec-21 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Dec-20 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Revenue </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹9,717 crore </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹10,894 crore </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Net loss </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹7,231 crore </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹4,532 crore </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">ARPU </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹115 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹121 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Subscribers </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">24.72 crore </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">26.98 crore </td></tr></tbody></table> Source: Company reports The decline in ARPU combined with a steep decline in the subscriber numbers resulted in a 11% fall in the company’s revenue. <cmsannotation type="cmsannotation" annotationid="Tariff hikes to reflect in ARPU later this year" comment="subhead" text="Tariff hikes to reflect in ARPU later this year">Tariff hikes to reflect in ARPU later this year</cmsannotation> The tariff hikes announced by the telco in November 2021 will take a while to reflect in the company’s ARPU, according to Takkar. However, there may yet be a silver lining in the dark clouds here – there’s a declining trend in Vodafone Idea’s subscriber losses. According to the telecom regulator’s (TRAI) subscriber data, Vodafone Idea lost over 5.6 million subscribers in October and November 2020. This is down to under 3 million in the same period in 2021. TRAI is yet to release data for December 2021. Apart from this, on a sequential basis, the company’s ARPU improved notably by over 5% to ₹115 from ₹107 in the September quarter. It is worth noting that the IUC (interconnect usage charges) regime was not present in both these quarters, which makes the numbers comparable. SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/there-is-a-silver-lining-in-vodafone-ideas-dark-numbers/articleshow/89086056.cms">There is a silver lining in Vodafone Idea’s dark numbers</a> <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-results-q3-fy22-profit-revenue-subscriber-growth/articleshow/89034299.cms">Reliance Jio is making the most money it has ever made from its subscribers</a> <a href="https://www.businessinsider.in/business/telecom/news/government-owning-vodafone-idea-is-just-half-the-task-the-other-half-is-to-find-the-money/articleshow/88836355.cms">Government owning Vodafone Idea is just half the task – the other half is to find the money</a>

You Searched For "vodafone idea earnings" and got 12 results

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Vodafone Idea shares in deep red as an uncertain future looms

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