Bharti Airtel is not in as good a position as Reliance Jio, but it is not in as bad a position as Vodafone Idea (Vi). It is fair to say that Bharti Airtel is in a position that it won’t mind whether the relief package comes or not. Airtel has booked profits in consecutive quarters and has also said that it will be raising capital soon. The company’s board has already approved the capital raising plans. There’s no doubt that Bharti Airtel will get fresh funding in a much easier manner than the struggling Vodafone Idea. Vi has been struggling to get new investors because even its promoters don’t want to infuse any more capital into the company.
But given the market scenario right now, Bharti Airtel should be satisfied with where it is now. Yes, there’s a lot of room for improvement. Both the regulatory norms and the average revenue per user (ARPU) needs to change, which will then contribute to the growth of the sector. The thing is, Bharti Airtel won’t be worried about the relief package as much as Vodafone Idea.
Bharti Airtel Will Do Great Regardless of Government Support
If the government support comes, yes, it will aid Vodafone Idea in a major way, but it will also help Bharti Airtel and Reliance Jio. But in case the government doesn’t bring a relief package or if the government announces measures that aren’t really that helpful, even then Bharti Airtel will do great.
But the same can’t be said for Vodafone Idea. Vi, without any immediate relief, will succumb to the losses and the debt it has on its books. Airtel has been adding subscribers consistently with just one bleep in the second quarter of CY21 or the first quarter of FY21.
Airtel has a strong 4G network throughout the country, and most of all, it has the funds and the resources to pay off its debt and also invest in its networks at the same time. Bharti Airtel won’t be worried about what the government is doing, but it will be happy if there are some relief measures.
Even with relief measures, Airtel expects to add millions of Vodafone Idea subscribers in the coming months. According to Jefferies, the shift has already started, and Vi will keep on losing subscribers if it can’t invest in its networks soon. It will be interesting to see what the government announces in terms of relief for the sector.