NEW DELHI: Telecom operators Bharti Airtel, Reliance Communications and Idea Cellular are expected to report a fall in profits and a squeeze on margins in the July-September quarter, say analysts.
The quarter is seasonally weak with no major festivals or harvest season. Companies are also expected to face stiff interest charges on borrowings. So far, telecom companies have been capitalising — or accumulating on the balance sheet without providing funds in the cash flow — the cost of debt they raised to buy third-generation radio waves from the government.
With 3G launches impending, some may start debiting factoring the cost of this debt on profit-and-loss accounts from this debt in the September quarter. The monthly average revenue per user — a key indicator of profitability — is also expected to drop between 3% and 5% for the operators, despite a stable pricing environment, analysts said.
economictimes.indiatimes.com/Telcos-to-feel-profit-squeeze-this-quarter
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