The quarter ended June 2022 proved to be a positive one for both Bharti Airtel and Reliance Jio while Vodafone Idea Limited (Vi) continued to report widening losses. While all three telcos reported a consistent increase in revenue, earnings before interest, taxes, depreciation and amortisation (EBITDA) for both Reliance Jio and Airtel continued to cross the Rs 100 billion mark during the quarter.
Operationally, Airtel remained in the lead with an ARPU of Rs 183. Meanwhile, Jio had the highest subscriber base of 419.9 million owing to net subscriber additions of 9.7 million, driven by strong gross additions and reduced impact of SIM consolidation.
The quarter ended on a positive note for Vi, with the telco completing the first tranche of fund raising in the form of preferential equity contribution of Rs 49.4 billion from its promoters, including an incremental infusion of Rs 4.4 billion by the Vodafone Group in July 2022.
A look at the financial and operational results of telecom operators during the quarter ended June 2022…
Reliance Jio
Reliance Jio continued its robust financial performance, with its parent company Jio Platforms Limited reporting a net profit of Rs 45.30 billion during the quarter ended June 2022, up from Rs 43.13 billion profit reported by the operator during the quarter ended March 2022. Further, the operator’s gross revenue increased from Rs 261.39 billion to Rs 275.27 billion while the revenue from operations grew from Rs 222.61 billion to Rs 234.67 billion during the same period. This can be attributed to the tariff hike and acceleration of fibre-to-the-home (FTTH) services. Meanwhile, the telco’s EBITDA continued to be above the Rs 100 billion mark and increased from Rs 109.18 billion to Rs 114.24 billion. However, its EBITDA margin declined from 49 per cent to 48.7 per cent.
On the operational front, the telco witnessed 9.7 million net subscriber additions driven by strong gross additions (35.2 million during the quarter ended June 2022) and reduced impact of SIM consolidation. Jio’s total customer base as of June 30, 2022 stood at 419.9 million.
The telco’s ARPU improved to Rs 175.5, reporting an increase of 4.8 per cent on a quarter-on-quarter basis. The increase in ARPU was driven by higher customer engagement. Meanwhile, the average data and voice consumption per user per month increased to 20.8 GB and 1,001 minutes, respectively. While the total data traffic was 25.9 billion GB during the quarter, the total voice traffic stood at 1.25 trillion minutes.
Jio continued to maintain its leadership position in FTTH services, connecting more and more homes. As per data published by the Telecom Regulatory Authority of India, Jio accounted for over 80 per cent of new customer additions in the wireline segment.
During the quarter, Jio launched a Bluetooth-enabled game controller with a 20-button layout, which offers an immersive experience with two vibration feedback motors, two pressure point triggers, and an eight-direction arrow button. It is compatible with Android Tablets, Android TV, Android and Jio Set-Top Box.
Bharti Airtel
Bharti Airtel’s consolidated net profit declined from Rs 20.08 billion during the quarter ended March 2022 to Rs 16.07 billion during the quarter ended June 2022. However, the operator’s consolidated revenues grew from Rs 315 billion to Rs 328.05 billion backed by a strong and consistent performance delivery across the portfolio. Meanwhile, the consolidated EBITDA increased substantially from Rs 159.98 billion to Rs 166.04 billion while the EBITDA margin declined marginally from 50.8 per cent to 50.6 per cent during the same period.
For the India business, Airtel reported an increase in quarterly revenues from Rs 225 billion to Rs 233.19 billion. In addition, the India business reported an EBITDA of Rs 118.82 billion. Further, the capex spending on Airtel’s India business stood at Rs 52.88 billion.
On the operational front, Airtel witnessed the highest ARPU among operators in the Indian market. Its ARPU increased from Rs 178 to Rs 183 owing to the company’s focus on acquiring and retaining high-value customers and maintaining quality customer experience. Airtel’s subscriber base increased from 360 million to 362 million. Further, Airtel continued to acquire a large share of 4G customers in the market with 4G data customers increasing by 20.8 million over the previous year. Meanwhile, the average data usage per customer stood at 19.5 GB per month and voice usage per customer at 1,104 minutes per month.
The telco also rolled out additional 8,000 towers in the quarter to optimally augment its coverage and provide differentiated network experience. Several initiatives were also taken to improve network quality by leveraging digital tools/probes to monitor and improve customer experience, and scale up voice over Wi-Fi (Vo-Wi-Fi) adoption to improve indoor experience. The operator now has over 44 million customers using Vo-Wi-Fi services.
For the Africa market, Airtel reported an EBITDA margin of 48.8 per cent and an EBIT margin of 33.7 per cent. Further, the capex spending for the quarter ended June 2022 stood at Rs 10.88 billion while the subscriber base stood at 131.6 million.
Vodafone Idea Limited
Vi’s consolidated net loss widened from Rs 65.45 billion during the quarter ended March 2022 to Rs 72.96 billion during the quarter ended June 2022. However, the telco’s revenue witnessed an increase of 1.7 per cent from Rs 102.39 billion to Rs 104.1 billion during the same period. On a year-on-year basis, the revenue growth was 13.7 per cent, which is the highest since the company’s merger.
The telco’s EBITDA (excluding Ind AS 116 impact) improved to Rs 21.1 billion, compared to Rs 19.7 billion during the previous quarter, aided by improvement in revenue. The capex spending during the quarter ended June 2022 stood at Rs 8.4 billion in comparison to Rs 12.1 billion during the quarter ended March 2022.
The operator’s gross debt (excluding lease liabilities and including interest accrued but not due) stood at Rs 1,990.8 billion and comprised deferred spectrum payment obligations of Rs 1,166 billion, adjusted gross revenue (AGR) liability of Rs 672.7 billion that is due to the government, and debt from banks and financial institutions of Rs 152 billion. Further, the net debt stood at Rs 1,982.2 billion.
On the operational front, Vi’s subscriber base declined to 240.4 million from 243.8 million in the previous quarter. However, the telco’s ARPU improved to Rs 128 during the quarter ended June 2022, up by 3.6 per cent from Rs 124 in the quarter ended March 2022. Further, its 4G subscriber base continued to grow. With 1 million customers added during the quarter, the operator’s 4G subscriber base stood at 119 million. Meanwhile, the data usage per 4G subscriber stood at around 14.3 GB per month.
Kuhu Singh Abbhi
