The brokerage firm said it derived L2L revenues for Q4FY21 from deducting interconnect revenues (calculated from access charges adjusted for non-IUC revenue) and adding the Rs 0.5 billion received in net interconnect settlement.
Though the telco’s subscriber base expanded by 15.4 million during the quarter, likely helped by the new tariff plan launch on JioPhone (at 18-33% discount), but the absolute ARPU (post-GST) is just Rs 46-56 (33-40% of blended ARPU) from the JioPhone users, it said.
Its subscribers’ retention rate was helped by a dip in the churn rate to 1.3% (vs 1.6% in the previous quarter), while gross subscribers’ addition increased to 31.2 million (up from 25.1 million in Q3FY21).
Minutes grew 6% QoQ to 1,033 billion, and data usage rose by 5.2% QoQ to 16,680 billion GB.
FTTH subscribers addition, meanwhile, was steady at 1.8 million-1.9 million for Q4FY21 on the base of 2.1 million in Q3FY21.
“If we adjust for FTTH revenues, then, underlying mobile revenues should have grown at only ~1% QoQ, which indicates RJio may be running into a risk of revenue market share loss in Q4FY21,” it said.
For FY21, RJio generated FCFE of Rs 37 billion (restricted due to a Capex of Rs 261 billion), which included an upfront spectrum payment of Rs 150 billion. Net debt stood at Rs 290 billion and the entire spectrum commitment stood at Rs 726 billion.
Capitalised Capex was Rs 150 billion in FY21 (21.4% of revenues).
“We have cut our FY22E/FY23E revenues by 2.4% each year on slower revenue growth, but see tariff hike helping drive growth, likely in H2FY22E,” ICICI Securities said.
“RJio needs tariff hikes to offset higher cost inflation. Network cost rose 30% in FY21 to Rs221bn and, considering rise in payment to tower and fiber InvIT, we estimate network cost inflation to remain high even in the next two years at least, not considering 5G rollout,” it added.
The recent spectrum purchase would add Rs 29 billion to depreciation and amortisation cost and Rs 27 billion to finance cost, and in case of low revenue growth as in Q4FY21, ICICI Securities expects Jio to log significant earnings decline in FY22. “We believe the company will also need tariff hikes to maintain earnings growth momentum,” it said.
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