The Indian telecom service providers are expected to post robust growth during the first quarter of the current financial year, banking on subscriber addition of around 8 million per month.
The average revenue per user (ARPUs), a measure of revenues generated from a single customer, is rising and will be around Rs 280 this quarter.
Religare Securities, in its estimates for the quarter, said: For Q1FY'09, the Indian telecommunications sector will report strong revenue growth, which will be driven by robust wireless subscriber base growth. We expect wireless operators to add 25.3 million subscribers, increasing the total number of subscribers to 276 million.
The sector is undergoing a capex intensive cycle with launches in new circles and expansion in the existing circles, which will dent the competition and grab the market share ahead of new player launches. We expect the profit growth to be lower than sales growth on the back of higher interest and depreciation costs towards capex funding, it added.
The leading private sector telecom major Bharti Airtel and Aditya Birla group GSM company Idea Cellular will announce their Q1 results on July 24, while Anil Ambani group company Reliance Communications is to come out with the numbers on July 31.
According to India Infoline, a reduction in STD and roaming tariffs during the first quarter by 40-50 per cent will also drive significant increase in traffic in the months ahead, thereby keeping revenue growth robust.
Steady monthly subscriber growth and modest ARPU increase will keep operators' revenue growth intact. However, Bharti Airtel and Idea Cellular are better placed than RCOM, which in the near term is likely to face ARPU pressures from its CDMA subscriber base, India Infoline said.
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