Telecom tariff hikes: Why urgency outweighs difficulty
SummaryThe benefit of reduced spectrum usage charges on the Ebitda margin front would be relatively lower in Q4 given that companies have already realized a larger share of the benefit in the previous two quarters. Margins are expected to be flattish sequentially.
Telecom operators are likely to report dull financial results for the quarter ended March (Q4FY23) in the absence of price hikes and fewer number of days sequentially. Revenue and average revenue per user (Arpu) growth is expected to moderate. For instance, BNP Paribas Securities India expects domestic telecom industry revenue growth to moderate to about 10% year-on-year in Q4 from 17.5% in Q3 as the benefit of previous tariff hikes gets absorbed in the base. The broking firm expects sequential revenue growth to moderate to 1.5%.