Bharti Airtel adds massive 3.6 crore subscribers in May; stock jumps

Bharti Airtel share price gained over 2 per cent on Thursday after the telecom major added a whopping 3.6 crore subscribers in May led largely by Telenor merger, while Reliance Jio remained a distant second by adding 93 lakh subscribers and Idea Cellular lost 25 lakh subscribers during the same months.

Reacting to the data, Bharti Airtel rallied as much as 2.56 per cent to Rs 345.45 on the BSE. Idea Cellular dipped 2.5 per cent to Rs 48.75, while Reliance Industries, parent firm of Reliance Jio, gained marginally to Rs 1101.50 on the BSE. 

The data from the Telecom Regulatory Authority of India (TRAI) showed the country's mobile phone customer base rose 0.53 per cent to 113 crore in May.

Meanwhile, foreign brokerage Jefferies remains cautious on telecom sector as it expects competitive intensity to remain high as fight for market share continues among telecom peers. 

The brokerage believes telecom operators will come up with muted June quarter results with ARPU down between 4-7 per cent quarter on quarter (qoq) and sub addition remaining low. It expects incumbents to report margin decline of more than 200 bps qoq and report losses.

Bharti Airtel’s June quarter revenues is estimated to rise 3 per cent qoq led by Telenor consolidation, mobile ARPU to fall over 7 per cent qoq and margins to decline 230 bps qoq led by moderation across all key business, said Jefferies in a results preview report. 

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The brokerage expects Idea Cellular to report 3 per cent qoq fall in revenue in Q1, led by decline in ARPU and expects margins to fall 280 bps qoq to below 14 per cent.

Jefferies sees gradual recovery in telecom space post equilibrium (post-mid-FY20). ARPU increases will require investment in both capacity and content, it added.