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Andrew Bonwick
Vice President of Product Development at Relm Insurance
Madhav Sheth
CEO of Ai+ Smartphone
Stephen Rose
CEO Render Networks
Bharti Airtel’s results for fiscal 2018-19 indicates a “rebound” in the Indian mobile sector amid easing competition, and industry revenue may rise by 5-10% this year, Fitch Ratings said Wednesday. “We believe the Indian mobile sector’s recovery is underway as the top-three telcos are likely to turn their focus towards profitability, while their revenue market shares are relatively equal at around 30-33%,” Fitch Ratings said in a note. Bharti’s ratings headroom is likely to improve with an equity infusion, planned asset sales and growing Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) from Africa, it noted.
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“We expect industry revenue to rise by 5-10% in 2019 – the first growth in three years – underpinned by easing competition and growing data traffic with the proliferation of affordable 4G handsets. We expect blended average revenue per user (ARPU) to rise by 10-20 per cent to around USD 1.6-1.7 per month in 2019, underpinned by the incumbents’ introduction of a minimum mobile tariff of Rs 35 (USD 0.50) per month and growing data use,” the note said.
The top three telcos are likely to drive tariffs higher by bundling value-added services, such as music, movies and sports, amid growing data consumption.
On Bharti Airtel, it said that an equity injection of USD 3.5 billion, a public equity offer by its African operations, and a stake sale in the merged entity of Indus Tower and Bharti Infratel would significantly ease pressure on the balance sheet.
“We forecast Bharti’s FY20 revenue and EBITDA to increase by the low single digits, driven by better ARPU for mobile and steady growth in the African and business-to-business (Enterprise) segments,” Fitch said.
