According to Morgan Stanley, digital offerings represent a growing area of investment for every telecom company, with Reliance Jio leading the way. Further, it added that while Jio is building or partnering for these offerings, Airtel and Vodafone Idea Limited (VIL) are largely going to opt for the partnership route.
The report pointed out that the June 2020 quarter trends diverged across average revenue per user (ARPU), subscriber and 4G ads. The quarter showed some impact from nationwide lockdowns with respect to recharges, gross ads, and lower roaming revenues. Further, as per the report, with smartphone shipments returning to pre-Covid levels, migration from 2G to 4G should somewhat normalise in the second quarter of fiscal. Data usage rose across networks, reflecting higher consumption during the lockdown.
As per Morgan Stanley, the adjusted gross revenue (AGR) verdict is keenly awaited and may dictate the future of VIL, ARPUs, and funding needs. Further, it added that while VIL’s financial situation is the most delicate, Jio and Airtel are in a comfortable liquidity position. VIL reported ARPU of Rs 114, down 5.8 per cent compared to March 2020 quarter, the earning per subscriber for Airtel jumped to Rs 157, up 1.9 per cent sequentially, and Jio to Rs 140, up over 7 per cent sequentially, the report added. On home broadband and enterprise offerings, it said Jio has laid out ambitious plans in the past, and Airtel and VIL are focusing on the segment, as well.
