Price Stabilisation Because of Minimum Recharge Plans Also, it is worth noting that stabilisation in the revenue has come because of the stable pricing and the introduction of minimum recharge plans for the prepaid subscribers. Since February 2019, none of the major telecom operators have introduced any cut in the tariff prices, informed India Ratings and Research Pvt. Ltd. The revenue trends are also unlikely to change and diverge in the recently ended June quarter as compared to the quarter ending in March. Both the top telecom operators, Bharti Airtel and Vodafone Idea are expected to report more stable revenue in the recent quarter in comparison to the quarter ending in March. In a preview note, an analyst at Kotak said, “Overall, our prognosis is that of a steady quarter with Bharti reporting a modest 1.6% sequential growth in wireless revenues and Vodafone Idea reporting a flattish revenue print, largely on the back of higher number of days in the June quarter versus March.” Even then, it is crucial to note that while the revenues have stabilised for the companies, the problems of the industry cannot be entirely forsaken. Growth Rate of Data Usage Per Subscriber Also Comes Down The numbers recorded for the March quarter also show a decline in volume growth. The report, as per Kotak, brought to notice that Industry voice volumes grew just 18% (YoY), which is the slowest growth rate since the launch of the latest telecom entrant of India, Reliance Jio. In the March 2019 quarter, the data usage per subscriber grew at a 1.6% sequential rate. This signalled that the growth might be close to hitting a wall since, in the previous three quarters, the growth rate was recorded to be 2.8%, 5.9% and 12.2%, respectively. There is also the fact to consider about the falling ARPU in the postpaid segment. There has been a recorded 33% YoY decline in postpaid revenue. The similar trends are expected to follow in the June quarter as well. The analysts at Kotak Institutional Securities added, “Even as like-for-like pricing has been stable for the past few quarters, incumbents continue to see net negative impact of consumers trading up and trading down on the average revenue per user axis.” Now, although the decline in volume is not yet worrisome for the telecom companies, they still have to shoulder the responsibility of driving more profits and correcting their financial sheets.
