Telcos Might Post Decent Result In Q4 2020: Report

Telecom operators like Reliance Jio, Vodafone-Idea, and Airtel are expected to post decent results in Q4 2020 due to tariff hike and the growing demand for mobile internet. In fact, voice calls have been increased to 25 percent during the lockdown.

UBS Securities believes that the revenue of both Airtel and Vodafone-Idea might increase to 8-10 percent quarter-on-quarters. "We do not expect the ongoing Covid-19 situation to have had a major impact on Q4 FY20 mobile numbers. We could, however, see a small impact in Q1 of FY21 due to a potential decline in pre-paid recharges," the firm said.

On the other hand, another firm Edelweiss Securities estimates that there will be an 11 percent quarter-on-quarter increase in revenues for Airtel. It said that the company is likely to increase its average revenue per user (ARPU) by Rs. 150 as against Rs. 135. In addition, the brokerage firm believes that the operator might add one million new subscribers.

Furthermore, the firm said that Reliance Jio might post a 10 percent jump in its revenue, and the telco is likely to add 20 million more subscribers. On the other hand, Axis Capital does not see any effect on Airtel profit due to the lockdown and Covid- 19. "We do not see a major impact from Covid-19 with some increase in recharges and broadband towards the end of March 2020," the brokerage firm said.

However, this is quite surprising that the brokerage firm seems confident about Vodafone-Idea's performance. The firm believes that the merged entity is likely to report a 3.6 percent growth in the last quarter of the last financial year. "Revenue improvement helped by tariff hike taken in December 2019, though the full impact is expected only in H1FY21 as more users come for recharge," Axis capital added.

Meanwhile, the operator has cleared its AGR dues for the March- ended quarter. The operator has submitted Rs. 1,367 crore to the Department of Telecommunication. In order to give a tough fight to Reliance Jio, Vodafone announced its merger with Idea is 2018. However, it seems that the merger is not helping any of them as both are losing customers.

The merged entity is struggling to clear its AGR dues. In fact, there are reports which claim that the operator will only survive if it gets 15 years to pay the whole amount, and in case if it shut down its business then only two operators will operate in the country, which is not good for the market and the consumers.

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