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n Seasonally weak quarter, keep expectations low. We forecast 1-2% qoq growth in wireless revenues for leading telcos, versus 5-6% growth reported by GSM leaders (Bharti/Voda/Idea) and 1.5% reported by RCOM, in 1Q. The slowdown would be due to weak minutes-growth (3.5-4.5% estimated vs. 10-13% in 1Q), as the rural business (20-25% of wireless revenues) tends to shrink in 2Q. Further, extended monsoons are an additional dampener this year. Nonetheless, ARPM decline should continue to moderate—we forecast 2-3% qoq drop vs. 4-7% reported by GSM leaders in 1Q. After declining for four straight quarters, we expect wireless EBITDA margin to stabilize, thanks to smaller ARPM drop and better cost control (lower sub acquisition costs, since lower gross adds).
n Bharti—2Q to reflect full quarter impact of Africa consolidation. Excluding Africa, we forecast revenue/EBITDA growth of 1.8%/2.5% qoq. For Africa, we assume ~110bps margin expansion and forecast EBITDA of `11bn. Our consol. IFRS PAT estimate of `20.26bn (`5.33 EPS) factors FX & Derivative gains of `1.6bn (ex Africa), vs. a loss of `1.43bn in 1Q. Actual reported PAT could turn out significantly higher than our est., due to FX gains on ~US$8bn debt in Africa holdcos
n Idea: We forecast consol. Revenue/EBITDA growth of 2%/5% qoq in 2Q, vs. 5%/3% in 1Q. We forecast EBITDA of`9.3bn and PAT of `2.24bn. Our forecasts assume 4.5% growth in minutes and 2.5% drop in the ARPM.
n RCOM: We model consolidated Revenue/EBITDA growth of 1.7%/2.1% qoq. While reported PAT may grow qoq, adj. PAT (excluding FX, derivative gains) is likely to decline due to taxes (mainly absence of deferred tax asset).
n Retain positive view on Bharti/Idea, and Hold/Sell on Tulip/RCOM.
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