The quarter ended June 2023 has been a financially healthy one for both Reliance Jio and Bharti Airtel, but it was not the case for Vodafone Idea Limited (Vi), which continued to witness a widening of its net loss. However, revenue for all the three telecom operators maintained an upward trend.
In terms of both earnings before interest, taxes, depreciation and amortisation (EBITDA) and average revenue per user (ARPU), Airtel overpowered Reliance Jio with an EBIDTA of Rs 141.54 and an ARPU of Rs 200, respectively. However, Reliance Jio continued to lead the industry in terms of net subscriber additions, with 9.2 million additions during the quarter ended June 2023 and a subscriber base of 448.5 million.
A look at the financial and operational results of telcos during the quarter ended June 2023…
Reliance Jio continued to witness positive financial growth during the quarter. The net profit reported by the telco’s parent company Jio Platforms Limited (JPL) increased by 12.5 per cent, from Rs 45.3 billion during the quarter ended June 2022 to Rs 50.98 billion during the quarter ended June 2023. Further, JPL’s gross revenue grew by 11.3 per cent from Rs 275.27 billion to Rs 306.4 billion during the same period. JPL also witnessed an increase of 11.3 per cent in its revenue from operations from Rs 234.67 billion in the quarter ended June 2022 to Rs 261.15 billion during the quarter ended June 2023. In terms of EBITDA, JPL witnessed a rise of 14.8 per cent from Rs 114.24 billion to Rs 131.16 billion during this period.
Meanwhile, Reliance Jio’s operating revenue rose from Rs 218.73 billion during the quarter ended June 2022 to Rs 240.42 billion during the quarter ended June 2023. The growth in operating revenue was driven by subscriber gains in the connectivity business and the scaling up of digital services. Jio’s EBIDTA grew from Rs 110.46 billion to Rs 126.63 billion, while the EBITDA margin increased from 50.5 per cent to 52.7 per cent during the period.
In terms of operational metrics, Jio continued to lead the industry in terms of net subscriber additions, with 9.2 million new subscribers during the quarter ended June 2023. The telco’s subscriber base stood at 448.5 million during the quarter ended June 2023. The monthly subscriber churn also decreased to 1.8 per cent during the quarter. Further, the ARPU increased by 2.8 per cent from Rs 175.7 during the quarter ended June 2022 to Rs 180.5 during the quarter ended June 2023, driven by a better subscriber mix and ramp-up of the telco’s wireline business. As per the telco, 5G adoption and fibre-to-the-home (FTTH) ramp-up have driven a strong 28.3 per cent year-on-year growth in data usage as monthly data traffic on Jio’s network crosses 11 exabytes during the quarter ended June 2023.
In terms of 5G roll-out, Jio deployed over 115,000 5G sites and around 690,000 5G cells as of June 2023. The telco believes that it is on track to complete the fastest 5G roll-out globally and announced that its pan-India 5G roll-out will be complete before December 2023. The quarter also saw the telco launching the JioBharat Phone to accelerate the 2G-Mukt Bharat vision by enabling the existing 250 million feature phone users to transition to internet-enabled phones.
Bharti Airtel’s consolidated revenue grew by 14.1 per cent from Rs 328.05 billion during the quarter ended June 2022 to Rs 374.4 billion during the quarter ended June 2023, backed by strong and consistent performance delivery across the portfolio. However, the telco’s consolidated net income (after exceptional items) increased only by 0.3 per cent from Rs 16.07 billion to Rs 16.12 billion during the period. Meanwhile, the operator’s consolidated EBITDA grew remarkably from Rs 166.04 billion to Rs 197.46 billion, while the EBITDA margin increased from 50.6 per cent to 52.7 per cent during the same period.
As far as the India business is concerned, Airtel witnessed an increase of 13.1 per cent in revenue from Rs 233.19 billion during the quarter ended June 2022 to Rs 263.75 billion during the same quarter in June 2023. In addition, the company’s India business posted an EBITDA of Rs 141.54 billion, with an EBITDA margin of 53.7 per cent. Further, capex spending on the telco’s India business saw a huge leap from Rs 52.88 billion during the quarter ended June 2022 to Rs 93.27 billion during the same quarter ended in June 2023.
On the operational front, Airtel posted the highest ARPU among all telecom operators in India. The telco’s ARPU for the quarter ended June 2023 increased to Rs 200 as compared to Rs 183 during the quarter ended June 2022, on the back of a sustained focus on acquiring quality customers and improved realisations on account of premiumisation. Further Airtel’s subscriber base in the India market increased from 362 million to approximately 383 million during the period. The telco’s 4G subscribers increased by 24.50 million on a year-on-year basis and now comprise 68 per cent of the overall subscriber base.
Further, Airtel rolled out around 9,200 towers during the quarter ended June 2023 to further strengthen its network coverage and provide seamless connectivity. The telco also remained at the forefront of transformative projects and became the first service provider to come up with fast 5G speeds for customers travelling on India’s first water metro service in Kochi. Moreover, the company launched unlimited 5G services for its customers. Meanwhile, Airtel business became India’s first enterprise to power over 20 million connected devices.
In contrast, Vi’s net loss widened substantially from Rs 72.97 billion during the quarter ended June 2022 to reach Rs 78.4 billion during the quarter ended June 2023. However, the telco’s revenue increased from Rs 104.1 billion to Rs 106.55 billion during the same period. The telco attributes this growth to an improving subscriber mix and 4G subscriber additions.
Further, the operator’s EBITDA (on a reported basis) declined from Rs 43.28 billion during the quarter ended June 2022 to Rs 41.57 billion during the quarter ended June 2023. Further, its EBITDA (excluding Ind-AS 116 impact) declined from Rs 21.1 billion to Rs 20.2 billion, primarily due to higher network expenses and customer acquisition costs, partially offset by the reduction in roaming and access charges. Moreover, Vi’s capex spending declined from Rs 8.4 billion during the quarter ended June 2022 to Rs 4.5 billion during the quarter ended June 2023.
The telco’s total gross debt (excluding lease liabilities and including interest accrued but not due) as of the quarter ended June 2023 stood at Rs 2,117.6 billion. It comprised deferred spectrum payment obligations of Rs 1,337.4 billion and an adjusted gross revenue (AGR) liability of Rs 668.6 billion, which is due to the government’s policy and debt from banks and financial institutions of Rs 95 billion and optionally convertible debentures amounting to Rs 16.6 billion. With cash and cash equivalents of Rs 2.5 billion, Vi’s net debt stood at Rs 2,115.1 billion. However, the telco’s debt from banks and financial institutions reduced by Rs 57 billion during the past one year, as it stood at Rs 152 billion during the quarter ended June 2022.
In terms of operational performance, Vi’s subscriber base continued to decline and fell from 240.4 million to 221.4 million during the period. However, the telco’s 4G subscriber base continued to grow for the eighth consecutive quarter and stood at 122.9 million during the quarter ended June 2023. Further, the telco’s ARPU improved from Rs 128 to Rs 139 during the period, primarily aided by migration of subscribers to higher ARPU plans.
In terms of 5G roll-out, Vi is in discussion with various network vendors for the finalisation of its 5G roll-out strategy. During the quarter ended June 2023, it completed device testing of all major original equipment manufacturers on its 5G network.
Kuhu Singh Abbhi