Airtel, Reliance Jio To Increase Market Share: Report

Both, Reliance Jio and Airtel are already doing well in the telecom industry, and now a new report claims that they will continue to increase their market share in the country. The report said that the financial health of the Vodafone-Idea is likely to decline further.

The brokerage firm said that the AGR debt will have a major impact on the operator. The Axis Capital has also decreased the revenue estimates of the operator as very fewer people are joining the network, due to tariff hike. Notably, the operator has recently increased the tariff prices by 30 to 42 percent. The company has recently launched four plans. The plans are priced at Rs. 149, Rs. 249, Rs. 299 and Rs. 399. These plans offer unlimited calling, messages, and data.

"We cut FY21/22E (estimates) revenue of wireless providers by 1-6 percent and EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortisation) margin by 20-100 bps (basis points)," Axis Capital said.

The firm also intimated that the telecom regulator TRAI is expected to delay the announcement on the floor pricing due to the nationwide lockdown. It said that Airtel is in a better place and it seems that the operator will pay all its dues on time.

"Due to economic stress from the lockdown, demand for relief by other industries may increase, which could impact Vodafone Idea's prospects of getting relief from the government," the brokerage firm added.

Furthermore, the firm said that the operators might not able to add new subscribers due to coronavirus as people are sitting at home, and almost all shops are closed. In fact, industry body COAL also expects that the user will go down.

"Subscriber addition to being hit for most of Q1FY21 due to 21-day lockdown and possibility of restrictions/ partial restrictions getting extended...also, conversion from 2G/3G to 4G may also be hit as it requires new SIM, which is difficult in a lockdown," the COAI added.