Bharti Airtel in a Golden Position

Bharti Airtel is likely now enjoying its time in the ruthless Indian telecom market. The same can’t be said for its rival, Vodafone Idea (Vi), which has been struggling to make ends meet. Bharti Airtel is in a golden position given the developments. The telco’s deal with Google was approved on June 30 by the CCI (Competition Commission of India). This means that Google now owns 1.28% of Bharti Airtel, against which it paid $700 million.

Airtel has also opted for deferring additional adjusted gross revenue (AGR) dues for periods up to FY2018-19 for four years, from FY2021-22 to FY2024-25. It will help save Airtel thousands of crores more in the medium term.

Most of all, Airtel has been generating free cash flows and prepaying dues to the Department of Telecommunications (DoT). While Airtel still has debt on its books, its business is as good as Jio’s in terms of making money.

What has worked out pretty well for Airtel is not just its mobile business. But the telco is in other verticals such as banking and B2B as well. All of these verticals are paying back to Airtel pretty well. Airtel Payments Bank has already turned profitable and now generating free cash flow for the Bharti Group.

Second Round of Telecom Reforms Coming Soon

The DoT is soon expected to announce new reforms for the sector. These reforms are going to help Airtel as well as other telcos. Given the position Airtel is in right now, the more help that comes its way, the better and faster its business will grow.

Airtel isn’t in the position that Vodafone Idea is. The telco is just thinking about profits, while Vodafone Idea is just thinking about survival. In an idealistic scenario, if things continue for Airtel the way they are going right now, the telco will soon become unbeatable, and Jio will really have very tough competition from Airtel for being the largest telco in India.