Telecom Services share price target

India's overall wireless subscriber count remained nearly unchanged at 114 crore in January, with a net increase of 90,000 subscribers.
While Reliance Jio and Bharti Airtel gained subscribers, Vodafone Idea and BSNL continued to lose subscribers.

Reliance Jio (RJio) has recently introduced new tariffs in its postpaid category, and made its fixed-broadband base plan more affordable. This has heightened anxiety among investors on potential increase in competitive intensity in India mobile services, and significant delay it might cause in effecting price hikes.

The Telecom Regulatory Authority of India (TRAI) has released its data on subscribers (subs) for Jan’23. Industry-wide active sub base rose by 3.9mn MoM (vs rise of 8.6mn in Dec’22 and rise of 0.6mn average in past six months) with Bharti Airtel (Bharti) adding 1.3mn subs (vs 1.3mn in past six months).

Reliance Jio (RJio) has launched its most affordable fixed broadband plan starting at Rs198/month, with generous entertainment bundling at Rs100, and Rs200/month additional payment.

We have attempted to demystify 5G capex for Indian telecom – Bharti Airtel (Bharti) and Reliance Jio (RJio). We have assumed 5G rollout to be faster than 4G. However, capex spent will be lower than 4G as it was deployed on multiple spectrum bands - 900MHz, 1800MHz, 2100MHz and 2300MHz vs only 3500MHz for Bharti’s 5G, while 800MHz, 1800MHz and 2300MHz vs 700MHz and 3500MHz for RJio’s 5G.

India's total wireless subscriber base marginally fell to 114 crore in December 2022. On a net basis, there was a loss of 1.1 lakh subscribers.

While Reliance Jio and Bharti Airtel gained subscribers, Vodafone Idea continued to lose subscribers.

The Telecom Regulatory Authority of India (TRAI) has released its data on subscribers (subs) for Dec’22. Industry-wide active sub-base rose by 8.6mn MoM (vs dip of 4.5mn in Nov’22 and dip of 0.9mn average in past six months) with Bharti Airtel (Bharti) adding 6.0mn subs (vs 0.7mn in past six months). Reliance Jio’s (RJio) active subs rose by 3.0mn in Dec’22 (vs +0.8mn in past six months).

As budget expectations were doing the rounds in January, telecom companies charted a wish list from the Centre to fuel growth. It included a reduction in levies to ease their financial burden. However, the Centre was not keen to play the role of the wish-granting genie. The Budget plans an increase in spending on telecom infrastructure to Rs 10,400 crore in FY24 from Rs 3,010 crore in FY23.

In Q2FY23, consumer spend on mobile services (post-GST) rose 2.5% QoQ / 20% YoY to Rs490bn (Rs1,961bn annualised). Net revenues rose faster at 3% QoQ / 24% YoY to Rs472bn on lower intercompany settlements.