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Community User Posted on 11:08am 16-Oct-2020

Any comments on telecom sector.

Will Vodafone Idea sustain in the market?

  • Community User I think Airtel yes. On Vodafone indication is that Govt will not honour the arbitration outcome. But better to wait and watch.

    12:57pm 16-Oct-2020

  • ICICIdirect Research Our fundamental research analysts expect both subscriber and ARPUs to remain firm in an otherwise seasonally weak quarter given a) return of migrants to cities, b) continued higher data usage and thereby pack upgrades and c) improved availability of recharges both digitally/physically as cities/towns have largely restarted post lockdowns. For Bharti Airtel (Airtel), we bake in subscriber addition of ~3 million (mn), while for Vodafone Idea (VIL), we expect sub loss of ~3 mn (much lower than average churn of ~10 mn seen in the last four quarters). For Airtel, reported ARPU is likely to see ~2% QoQ growth at | 160. Indian wireless revenues are expected to see 2.6% QoQ growth at | 13,213 crore. For Vodafone Idea, with ARPU growth of ~3% QoQ at | 117, we expect overall revenues to grow 0.9% QoQ at | 10,753 crore.

    Company-Specific view - Vodafone Idea: We expect churn for V Vodafone Idea to continue, albeit reverse migration of laborers to cities to arrest the same. We consequently bake in ~3 million customer exits on a QoQ basis, much low er than the average churn of ~10 mn seen in the last four quarters. We build in A RPU growth of ~3% Q oQ a t |117, aided by higher data-based usage upgrades. We expect overall revenues to grow 0.9% Q oQ a t |10,753 crore. Reported margins are expected at 36.4% , down 200 bps QoQ as Q 1 had one-off benefits of |300 crore in licence fee and network & IT cost. The company is expected to post a net loss o f |5892 crore. Ke y monitorable: Fund raising plans and ARPU trajectory ahead.

    For more details, click on the below link:
    https://www.icicidirect.com/mailimages/IDirect_Telecom_Q2FY21.pdf

    07:14pm 17-Oct-2020