BackBroadband use, surge in Arpu to drive Q3 for telcos
JM Financial in its Q3FY21 preview note has predicted Arpu growth of 1.5% sequentially for both Bharti and Jio, while for Vodafone Idea, it could be higher due to more headroom for higher data usage
PremiumContinued robustness in mobile broadband (BB) subscriber additions, along with Average Revenue Per User (Arpu) growth from upscaling and higher data usage are expected to drive the third-quarter telecom industry performance, according to analysts.
JM Financial in its Q3FY21 preview note has predicted Arpu growth of 1.5% sequentially for both Bharti and Jio, while for Vodafone Idea, it could be higher due to more headroom for higher data usage and decline in low-Arpu 2G subscribers.
Arpu measures the realization per subscriber and is a key monitorable metric for telecom firms.
“We expect 3QFY21 to be marked by continued robustness in MBB (Mobile Broadband—3G/4G) subscriber additions, primarily driven by the demand for ed-tech and the continuing work from home and the strong smartphone shipments," JM Financial said.
In the absence of tariff hikes, it expects Arpu growth to be led by mobile broadband additions and higher data usage.
Bharti Airtel is likely to outperform Jio in subscriber additions for the second quarter in a row primarily due to its higher subscriber market share among incremental mobile broadband users, it said, anticipating continued subscriber losses for Vodafone Idea (VIL).
Axis Capital has said wireless service providers’ revenue should improve year-on-year in Q3FY21 on continued subscriber addition, as the impact of tariff hike of December 2019 for Bharti Airtel and RJio has already been captured.
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