Bharti Airtel, Vodafone Idea Performance Continue to Diverge as Jio Grows: Fitch

Going forward, Telcos are likely to monetise their tower and fibre assets to deleverage and create financial flexibility

Highlights
  • Jio posted revenue growth of 44% and 37% growth in operating profit in June quarter
  • Jio is now the leading telco in terms of overall subscriber base

Reliance Jio’s aggressive posturing has begun to show the divergent impact on entrenched telcos, with Vodafone Idea getting impacted sharply and Bharti Airtel holding on, a report said on Monday. The deep-pocketed Jio’s entry has so far impacted all the telcos, forcing mergers and also bankruptcy filings. For Vodafone Idea, it was the market share loss to Jio which proved to be the undoing and led to a weak numbers for the June quarter, Airtel could hold on, global rating agency Fitch said in a note.

The agency also estimated that Airtel, which has now begun the third biggest telco after Reliance Jio and Vodafone Idea, to show operating profit growth in India this year on improvements in average revenue per user (ARPU), easing competition and cost savings.

It said Airtel’s operating profit grew 7% during the June quarter as compared to the three months ending March on an ARPU growth and shift of more consumers to the 4G network.

Vodafone Idea’s revenue slipped 4% and operating profit was down 22% during the same period, as it lost 14 million subscribers, it said.

In comparison, Jio posted revenue growth of 44% and 37% growth in operating profit, it said.

Internet experience is the key aspect which is influencing customers and not tariff where no differentials exist, it said, adding that Bharti and Vodafone-Idea are improving their 4G coverage.

Going forward, Telcos are likely to monetise their tower and fibre assets to deleverage and create financial flexibility, it said in the note that comes days after Jio announced a Rs 25,000 crore deal to sell tower assets to Brookfield.

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Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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Ramasamy Recent comment authors
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Ramasamy
Ramasamy

Airtel and Vodafone Idea are digging thier own graves by sending SMS to customers that your service will be stopped and forcing people of India with recharge.

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