Bharti Airtel is expected to report an improvement in its average revenue per user (ARPU) for the second consecutive quarter after the company rolled out minimum recharge plans for users to stay on its network at a time when it battles cheap tariffs from rival Reliance Jio.

Airtel will announce its earnings for the March quarter today. Reliance Jio posted a profit of 840 crore for the March quarter. In the December quarter, Airtel’s profit had plunged 72% to 86 crore from 306 crore a year earlier.

The operator’s topline has continued to remain under pressure after Jio’s entry in September 2016 brought down tariffs to rock-bottom.

However, analysts believe that a large part of tariff downtrading is now complete, therefore stability in revenue is likely, unless Jio initiates a new round of tariff war to accelerate its subscriber growth. As of February end, Airtel had 340.3 million users while Jio had 297.2 million users.

Kotak Institutional Equities expects a modest 1% sequential uptick in Airtel’s revenue to 10,300 crore.

“Reported ARPU will likely see a sharp 14% quarter-on-quarter uptick to 120, largely optical on account of the sharp subscriber base clean-up done in December 2018," Kotak said in a report dated 8 April. Rival Jio’s ARPU for March quarter was 126.2.

Average revenue per user for Bharti Airtel was 104 in the December quarter, an improvement from 100 from the preceding September quarter, the first such increase after nine straight quarters of decline. However, the rise was merely due to the fact that the company had modified the prepaid customer base definition in order to represent only the customers who transact and generate revenue.

Motilal Oswal, which expects Bharti to post a loss of 720 crore, expects that its India wireless revenue, coupled with an uptick in its Africa business, should drive consolidated revenue growth of 1% quarter-on-quarter.

Bharti Airtel’s Africa arm swung to a quarterly net profit from a year-earlier loss because of an increase in transaction value on its Airtel Money platform and higher data consumption on its network.

The Africa operations posted a net profit of $83 million in the March quarter, compared to a loss of $49 million a year earlier, the company said in an earnings announcement on 30 April.

The improved earnings is significant for Bharti Airtel’s Africa arm, which is gearing up for an initial public offering in June-July, while it also battles a bruising tariff war with rival Reliance Jio at home.

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