The telecommunication giants Bharti Airtel and Idea Cellular may experience a considerable dip in revenues in the second quarter of this year. This is speculated to be caused due to the increase in the indirect tax pay-outs, seasonal weakness and wearing down of prices.
Idea Cellular will show a more steep negative operational impact predicted Bank of America – Merrill Lynch. The bank foresaw a 7.5% on-quarter fall in revenue in the telecommunication industry during the July – September period. They had also mentioned that Idea may report a customer loss of around 3 million people due to their poor 4g footprint when compared to Reliance Jio and Airtel.
The slide in revenue is attributed by some to the fact that telecommunication companies now have a higher proportion of rural customers.
Brokerage Kotak Institutional Equities said, “A material negative externality is the 18% GST versus 15% service tax that was levied earlier.” And, went on to say, “wireless operators are absorbing most of the impact of this indirect tax increase.”