Telcos likely to post higher margins in Q4: Barclays
Buoyed by increased revenue per minute and subscriber churn from smaller operators, telecom majors are expected to post higher revenues and margins in the fourth quarter of the last fiscal, says a Barclays report.
April 05, 2013 / 23:16 IST
Buoyed by increased revenue per minute and subscriber churn from smaller operators, telecom majors are expected to post higher revenues and margins in the fourth quarter of the last fiscal, says a Barclays report.
"Reducing competition should have helped incumbents to show the first signs of a reversal in the declining revenue per minute (RPM) trend seen over multiple years. Usage should also improve on the back of a shift from smaller telcos. This should lead to revenue growth and margins on the back of positive RPM momentum in Q4 for Bharti, RCom and Idea," Barclays said. The Supreme Court, in February last year, has cancelled 122 licences issued since January 2008 after it found that the government did not follow transparent methods. Consequently, operators like DB Etisalat and S Tel shut their operations while Uninor scaled down its activity and subscribers of the affected telcos moved to other operators. Besides, many of them are cutting back on promotions, which is expected to help margins and profits in the coming quarters, said the report. "With reducing competition and increasing instances of sporadic reduction in discounts, should start reflecting in the RPMs this quarter," the report added. Barclays said some of the key issues to watch for in the results would be the pace of increase in data and non-voice revenues, competitive intensity and their responses to regulatory issues like the failed auctions and licence renewals. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
