Telcos like Airtel to Launch New Plans and Tariffs to Protect Market Share: Moody’s

Intense competition will persist over the next 12 months as Reliance Jio is expected to remain aggressive in acquiring new subscribers and growing the data market Moody’s Investors Service said. The agency added that telcos like Bharti Airtel would launch new plans and tariffs to protect and grow market shares following intense price competition over the next several quarters.

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The agency said that Bharti Airtel’s ability to expand profitability for its core Indian mobile operations relies on the company retaining its higher ARPU subscribers while increasing the pace of customer acquisitions organically and through acquisitions.

This competition will occur even though ongoing and transformative consolidation in the sector and Reliance Jio tariff plan will help stabilise the industry’s average revenue per user (ARPU) over the longer term, Moody’s added.

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Moody’s has also affirmed Bharti Airtel’s Baa3 issuer rating and senior unsecured debt ratings, as well as the Baa3 ratings on the senior unsecured notes issued by Bharti Airtel International (Netherlands) B.V., which are irrevocably and unconditionally guaranteed by Bharti. At the same time, Moody’s has changed the outlook on the ratings to negative from stable.

“While Bharti recorded 4.3% growth in reported consolidated EBITDA year-over-year at 31 March 2017, the effects of intense competition in the India mobile services segment were particularly evident in the fourth quarter, as revenues and reported EBITDA for its India mobile services segment fell 11% and 19%, respectively. This was partially offset by the year-over-year EBITDA growth in non-mobile services in India as well as healthy EBITDA growth in Africa,” said Annalisa Di Chiara, a Moody’s Vice President and Senior Credit Officer.