Will zero IUC distort Airtel’s Q4 numbers? Analysts in two minds
Most analysts expect the telecom operator to report double-digit growth in consolidated sales, but said the implementation of zero interconnect usage charges (IUC) could distort the numbers for the wireless business.
The profitability and revenues for the Africa business could be affected by a halt of subscriber acquisitions, as directed by authorities, and a slight depreciation of the Nigerian currency Naira, they said.
Emkay Global projects Bharti’s consolidated profit at Rs 7.4 crore compared with a Rs 5,237 crore loss reported for the year-ago quarter. Sales are seen rising 11.7 per cent YoY (down 0.1 per cent) to Rs 26,499 crore from Rs 23,723 crore in the year-ago quarter. Ebitda margin is seen expanding 358 basis points to 46.4 per cent from 42.8 per cent year on year.
“India wireless revenues are projected to decline 2 per cent QoQ, impacted by zero IUC revenues, while being offset by gross subscriber additions of 1 crore. Strong data on subscriber additions at 1.31 crore should limit the decline in Arpu at 7 per cent QoQ. Data volumes and minutes on the network are likely to rise 9 per cent and 5 per cent QoQ, respectively. Supported by a low base, revenue for the home broadband business should grow 4 per cent QoQ, while the enterprise segment should see a moderation,” the brokerage said.
Zero IUC was implemented by telecom regulator Trai with effect from January 1, 2021.
ICICIdirect projects Bharti’s profit at Rs 169 crore and expects the telecom operator to report 90 lakh subscriber addition for the March quarter. Revenues are seen rising 10.7 per cent YoY (down 1 per cent QoQ) to Rs 26,252 crore.
The reported Arpu is likely to decline 6.5 per cent sequentially to Rs 155, led by a mix of 9 per cent decline owing to IUC impact, partly offset by a 2.5 per cent like-to-like growth, it said. Ebitda margin is seen at 48.5 per cent, with Africa margins likely to remain stable sequentially at 46.5 per cent, the brokerage said.
Motilal Oswal Securities, meanwhile, expects Rs 1,935 crore profit for the quarter on a 11 per cent rise in sales at Rs 26,300 crore. This brokerage expects a Rs 14 hit on Arpu, while India organic wireless Arpu is projected to improve 1.5 per cent. It expects 5 per cent subscriber growth in home broadband and 2 per cent growth in revenue from the enterprise business.
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