Analysts at Motilal Oswal Financial Services have revealed three Indian private telecom operators have achieved growth of 8 percent QoQ and 17 percent YoY in wireless revenue during the second-quarter of fiscal 2025.
India’s private telecom operators include Bharti Airtel, Vodafone Idea and Reliance Jio.
Blended wireless ARPU grew 9 percent QoQ and 11 percent YoY, driven by partial benefits of tariff hikes in July 2024. However, due to SIM consolidation after the tariff hikes, subscribers for private telcos declined by ~21 million, representing 2 percent QoQ drop.
EBITDA for private telcos rose ~10 percent QoQ and 18 percent YoY, driven by ~70 percent incremental margins.
Bharti Airtel is the biggest gainer in 2QFY25, with ~90bp QoQ gain (~175bp YoY) in revenue market share (RMS) and ~40bp QoQ gain (+60bp YoY) in subscriber market share (SMS).
Reliance Jio lost ~45bp QoQ (–15bp YoY) RMS and ~30bp QoQ (up 100bp YoY) SMS in 2Q due to the clean-up of inactive subscribers.
Vi (Vodafone Idea) lost market share, with RMS down ~45bp QoQ (–160bp YoY) and SMS down ~10bp QoQ (–165bp YoY).
Wireless capex for Airtel and Reliance Jio moderated sharply in 1HFY25 following the completion of the first phase of 5G rollouts.
Vi’s capex inched up moderately following the fund raise.
Airtel’s India wireless capex declined 30 percent YoY (down 18 percent QoQ) to INR40b, with India capex reducing 20 percent YoY (8 percent QoQ) to INR63b. Airtel’s 1HFY25 India capex stood at ~INR130b and it could inch up in 2H; however, we believe Bharti’s India capex likely peaked in FY24 (~INR335b) over a medium-term perspective.
Jio’s 1HFY25 cash capex was up 17 percent YoY at ~INR200b, likely on repayment of capex creditors. However, Jio’s asset additions (an indication of committed capex and interest capitalized) declined to ~INR205b (from INR380b YoY).
Vi’s 2QFY25 capex increased to INR14b (from ~INR8b in 1Q) as it rolled out ~42k 4G sites. Management indicated that capex would further rise to INR80b in 2HFY25 as Vi targets to further ramp up its 4G population coverage and selectively roll out 5G services.
The home broadband subscriber net additions accelerated for Bharti Airtel / RJio in 2Q, with the ramp-up in fixed wireless access (FWA) offerings.
Blended wireless ARPU improved ~9 percent for private telcos, with Airtel leading with ~11 percent QoQ uptick, followed by Jio and Vi with ~7 percent QoQ improvement each.
The tariff hikes led to SIM consolidation and a 40-110bp QoQ increase in monthly churn. Their reported subscriber base declined ~21m (-2 percent QoQ), with Jio reporting the highest wireless net subscriber decline of ~12-13 million, followed by 5 million decline for Vi and modest ~3 million decline for Bharti Airtel.
