Telecom Q2 preview: Bharti Airtel, Jio seen adding 4.1 mn, 7.2 mn mobile subscribers in Sept quarter

Bharti Airtel and Reliance Jio are expected to add around 4.1 million and 7.2 million mobile subscribers, respectively, in the September quarter, while average revenue per user (ARPU) is likely to rise for both telecom operators, according to Elara Securities.

The brokerage, in its earnings preview for the telecom sector, expects Airtel’s ARPU to increase 1.2% sequentially and 4.5% year-on-year to ₹267 in Q2FY27. Jio’s ARPU is estimated to rise 1% QoQ and 3% YoY to ₹218.

Vodafone Idea, which is not rated by Elara, added around 0.75 million subscribers during July-August, indicating an improvement in subscriber retention, the brokerage said.

For Indus Towers, Elara expects around 1,300 tower additions and 4,700 tenancy additions during the quarter, supporting around 5% YoY growth in rental revenue.

Telcos expected to report steady Q2

Elara expects telecom companies to report a steady second quarter, supported by subscriber additions and growth in home broadband. Migration to higher-priced plans, upgrades to 4G/5G, conversion to postpaid and other premiumisation strategies are expected to support ARPU.

“Q2 is likely to be a steady quarter,” Elara said, adding that near-term stock price performance of telecom operators may also depend on the valuation that Jio Platforms commands in its upcoming IPO.

Airtel is likely to benefit from the discontinuation of lower-value packs, which could encourage subscribers to migrate to higher-value plans. However, the brokerage expects the benefit in Q2 to be partial, depending on recharge cycles.

“We expect double-digit topline and EBITDA growth for Bharti Airtel and Reliance Jio (Not Listed), while Bharti Hexacom and Indus Towers are set to post mid-single-digit topline growth,” Elara said.

The brokerage expects Airtel’s consolidated revenue to increase around 3.1% QoQ, supported by growth in India mobile revenue as well as continued growth in homes and Airtel Africa.

For Jio, the brokerage noted that the company has introduced an ₹300 Prime membership, offering price protection on eligible plans until September 5, 2027. While the move could support customer retention, tariff hike benefits would be limited for subscribers enrolled in the programme during the protection period.

Media reports indicate that Jio Platforms could list on October 28 at a valuation of ₹13-15 lakh crore, compared with Airtel’s market capitalisation of around ₹11.1 lakh crore, the brokerage said.

Telecom companies have reiterated the need for tariff repair, although the timing of an industry-wide tariff hike remains uncertain.

“In our view, India’s telecom sector is in a multi-year recovery, driven by ARPU improvement, structural data demand, and lower incremental capex. We are positive on BHARTI in the space,” Elara said.