The quarter ended (QE) December 2022 was a financially healthy one for Bharti Airtel and Reliance Jio, while Vodafone Idea Limited (Vi) continued to post widening losses. All three telecom operators maintained an upward trend in revenue. The earnings before interest, taxes, depreciation and amortisation (EBITDA) for both Jio and Airtel remained above the Rs 100 billion mark during the reported quarter.
The key highlight of the quarter was the phased roll-out of 5G services across the country. Airtel became the first operator to launch 5G services using non-stand-alone (NSA) architecture, while Jio announced the launch of its True 5G services using 5G standalone (SA) technology.
Operationally, Airtel had the highest average revenue per user (ARPU) at Rs 193. Meanwhile, Jio maintained its market leadership in terms of subscriber base with a net subscriber addition of 5.3 million and a total of 432.9 million customers.
A look at the financial and operational results of telcos during the quarter ended December 2022…
Reliance Jio continued to demonstrate positive financial growth. The net profit reported by the telco’s parent company, Jio Platforms Limited, grew from Rs 47.29 billion during the quarter ended September 2022 to Rs 48.81 billion during the quarter ended December 2022. The telco’s gross revenue for the quarter stood at Rs 291.95 billion, up from Rs 285.06 billion in the previous quarter. Meanwhile, the revenue from operations increased to Rs 248.92 billion from Rs 242.75 billion during the same period, driven by a steady increase in both the subscriber base and ARPU for the connectivity business. Further, the operator’s EBITDA continued to be above the Rs 100 billion mark and increased from Rs 120.11 billion to Rs 125.19 billion, mainly led by robust revenue growth and margin improvement. The EBITDA margin increased to 50.29 per cent due to increased ARPU and benefits from lower spectrum usage charges.
On the operational front, the net subscriber addition on Jio’s network stood at 5.3 million as gross additions remained strong at 34.2 million during the quarter ended December 2022. The telco’s total customer base as of December 31, 2022 stood at 432.9 million.
Jio’s ARPU increased slightly to Rs 178.2, a quarter-on-quarter (QoQ) increase of 0.56 per cent. The increase in ARPU can be attributed to a better subscriber mix. The total data traffic during the quarter stood at 29 billion GB, while the total voice traffic was recorded as 1.27 trillion minutes. As of December 2022, Jio had extended the coverage of its 5G services to 134 cities across 22 states and union territories in India.
The company plans to complete its pan-India 5G roll-out by December 2023. Further, Indian Oil Corporation Limited (IOCL) selected Jio for providing software-defined wide area network (SD-WAN) solution that will power IOCL’s retail automation and critical business processes. Jio will be deploying and managing SD-WAN for IOCL across its 7,200 retail outlets for a period of five years. This is one of the largest deployments of SD-WAN solutions in India across any industry.
Bharti Airtel registered an increase in consolidated revenues from Rs 345.27 billion during the quarter ended September 2022 to Rs 358.04 billion during the quarter ended December 2022, backed by strong and consistent performance delivery across the portfolio. However, the consolidated net profit plummeted from Rs 21.45 billion to Rs 15.88 billion. Meanwhile, the operator’s consolidated EBITDA grew remarkably from Rs 177.21 billion to Rs 186.01 billion and the EBITDA margin increased from 51.3 per cent to 52 per cent during the said period.
For the India business, Airtel witnessed an increase in quarterly revenues from Rs 243.33 billion to Rs 249.62 billion. In addition, the India business posted an EBITDA of Rs 131.67 billion with an EBITDA margin of Rs 52.74 billion per cent. Further, the capex spending on the telco’s India business saw a huge leap to Rs 80.95 billion from Rs 56.84 billion in the previous quarter.
On the operational front, Airtel posted the highest ARPU among all telecom operators in India. Its ARPU for the quarter stood at Rs 193 as compared to Rs 190 in the previous quarter, owing to the telco’s continued focus on quality customers and premiumisation. Airtel’s subscriber base increased from 364 million to approximately 369 million. Further, the operator continued to capture a large share of 4G customers in the market and added 21.2 million 4G data customers to its network over the past year. The average data usage per customer remained at 20.3 GB per month. Airtel has launched its 5G services in around 25 cities as of December 2022 and plans to cover all towns and key rural areas of the country by March 2024. Further, Airtel rolled out an additional 8,600 towers during the quarter, to further strengthen its network coverage and provide ubiquitous connectivity. Several initiatives were also undertaken to improve network quality by leveraging digital tools/probes to monitor and improve customer experience. Additionally, the telco launched “Airtel World Pass” with the aim to revolutionise the experience for all international travel as one pack works seamlessly across 184 countries and covers layover at an airport or travelling to two or more countries.
Vodafone Idea Limited
Vi’s consolidated net loss continued to widen from Rs 75.95 million during the quarter ended September 2022 to Rs 79.9 million during the quarter ended December 2022. However, the telco reported a marginal QoQ increase of 0.09 per cent in revenue from Rs 106.1 billion to Rs 106.2 billion supported by improvement in subscriber mix, tariff intervention and 4G subscriber additions.
The operator’s EBITDA (excluding Ind AS 116 impact) declined to Rs 20 billion compared to Rs 21.2 billion in the previous quarter, mainly due to higher charges on account of customer acquisition costs and higher network expenses, partially offset by savings in spectrum usage charges. The capex spending during the reported quarter was Rs 7.5 billion as against Rs 8.4 billion during the previous quarter.
Vi’s total gross debt (excluding lease liabilities and including interest accrued but not due) increased to Rs 2,228.9 billion. It comprised deferred spectrum payment obligations of Rs 1,398 billion, adjusted gross revenue liability of Rs 699.1 billion, which is due to the government, and debt from banks and financial institutions of Rs 131.9 billion. The net debt stood at Rs 2,227.3 billion.
With regard to operational performance, Vi’s subscriber base continued to fall, to 228.6 million from 234.4 million in the previous quarter. However, the telco’s ARPU improved to Rs 135, up by 3.3 per cent QoQ from Rs 131 in the quarter ended September 2022. However, it recorded consistent growth in its 4G subscriber base with a net addition of 1 million 4G customers during the quarter. With this, Vi’s 4G subscriber base stood at 121.6 million as of December 31, 2022. Meanwhile, data usage per broadband customer was around 15.1 GB per month. The telco announced that it is in discussion with various network vendors for the finalisation of its 5G roll-out strategy, which can be executed quickly, once funding is in place