Steep pre-paid tariff cuts at the start of the year in January could mean lower revenue growth for telecom operators in the March 2008 quarter.

Sequential revenue growth for the bigger players could be in the region of 5-6 per cent rather than the 7-10 per cent as seen in the last few quarters.

Moreover, minutes of usage (MOU) are unlikely to be very much higher since industry watchers feel users will take some amount of time to react to the tariff cuts.

Thus, MOUs would probably grow at 1-1.5 per cent sequentially, much like what happened in the December 2007 quarter when they ranged between 375-475 minutes for the bigger players. A higher growth number for the MoU would indicate better price-elasticity and be a big positive for the industry.

The average revenue per user (ARPU) for the bigger service providers -- which ranged between Rs 260 and Rs 380-- should not decline by more than 3 per cent to 4 per cent from the previous quarter.

The revenue per minute -- which was around Rs 0.75 in the December quarter -- could see a fall thanks to the fall in the rates of outgoing calls and despite an estimated growth of 26 million subscribers in the fourth quarter, service providers like Bharti Airtel, Reliance Communications and Idea Cellular are estimated to report a sequential revenue growth of between 5-6 cent.

The operating profit growth these telcos could be in the region of 6-7 per cent. For integrated players such as RComm and Bharti, dollar denominated revenues from incoming ILD, bandwidth and data sales, would get a boost given the slight appreciation in the rupee during the quarter.

However, net profits may remain flat sequentially due to foreign exchange fluctuations.