Vodafone-Idea Likely To Post Loss In Q1 FY22: Here's Why

After posting profit in the Q4 of the last financial year, telecom operators are expected to report a loss in Q1. There are chances that Airtel and Reliance Jio might consume Vodafone-Idea's market share along with average revenues per user.

Besides, there are chances that India's third-largest telecom operator Vodafone-Idea, which is struggling to raise funds is likely to post Rs. 6,600 crores loss in the quarter.

Brokerage Firms Views On Q1 Performance

"Q1 FY22 was marked by the second wave led lockdown, impacting subscriber additions, and validity extensions for the bottom-of-the-pyramid customers, which will restrict Arpus," said ICICI direct.

Meanwhile, Edelweiss said that Vodafone-Idea reports a drop in revenues. The firm projects that the telecom operator might post Rs. 6, 526 crores. Notably, the telecom operator posted a loss of Rs. 7,022 crores in Q4 FY21.

Airtel Expected Performance In Q1 FY22

Airtel might post a profit close to Rs. 500 crores against Rs. 15, 933 crores loss in the Q4 FY20. In addition, India's leading telecom operator Reliance Jio is expected to report a profit of Rs. 3,470 crores.

"Wireless revenues for the quarter are projected to be relatively tepid, dragged by sluggish smartphone sales, which were hit by localized lockdowns, free recharges doled out by companies for the bottom-of-the-pyramid subscribers, and an overall moderation in subscriber additions," Emkay said.

On the other hand, another brokerage firm expects that Airtel might post a profit of Rs. 318 crores, while Vodafone-Idea is likely to report a loss of Rs. 6,628 crore. Similarly, ICICI Securities expects that Airtel might log Rs. 392 crores profit and Vodafone is expected to report Rs. 6,673 crores loss.

New Subscriber Addition In Q1 FY22

Apart from making a profit in Q1, these brokerage firms said that Reliance Jio's average revenue per user might increase up to Rs. 140 from the current Rs. 138 in Q4 FY21. Airtel ARPU might reach Rs. 146.5 from Rs. 145, and Vodafone-Idea might increase ARPU to Rs. 108 from Rs. 103.

Additionally, Reliance Jio might add 50 lakh users; however, Airtel might not add such a big number, whereas Vi might decrease by 40 lakh.