Airtel is setting a good tone

It was a foregone conclusion that Indian private telecom companies would do well in the September quarter (Q2FY25) thanks to the tariff hikes taken in July and the ongoing premiumization trend of SIM card upgrades.

- Abhinaba Saha

This has played out with aggregate wireless revenue for the three private telcos—Reliance Jio Infocomm Ltd, Bharti Airtel Ltd's India arm, and Vodafone Idea Ltd—rising by 8% sequentially.

"Driven by the partial flow-through of tariff hikes, blended wireless average revenue per user (ARPU) improved about 9% for private telcos, with Bharti leading with about 11% quarter-on-quarter uptick, followed by Jio and Vodafone with about 7% improvement each," said Motilal Oswal Financial Services.

Companies raised tariffs by about 10-20% in July. The hikes usually start late for postpaid subscribers and customers with longer-tenure prepaid plans. Thus, EBITDA margins and Arpus are expected to improve further in the second half of FY25. In Q2, EBITDA margins of the three companies were up 50-160 basis points (bps) sequentially. Ebitda stands for earnings before interest, taxes, depreciation, and amortization.