Vodafone-Idea Might Lose 50 To 70 Million Users In 12 Months: Here's Why

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Even though Vodafone-Idea lost millions of users, it is likely to lose 50 to 70 million customers in the next 12 months. On the other hand, there is a chance for Reliance Jio and Airtel to attract Vi's user base and market share.

 
Vodafone-Idea Might Lose 50 To 70 Million Users In 12 Months: Here's W

"So there is an opportunity for both Jio and Bharti to gain subscribers and revenue market share at the expense of Vodafone Idea. These investments through the rights issuance will help them to further strengthen their network position and to gain more subscribers, especially at the expense of Vodafone Idea," Nitin Soni of Fitch Ratings said.

Airtel Plans To Increase Its ARPU

The company announced its plans to increase tariffs of prepaid plans to increase its average revenue per user (ARPU) by the end of this financial year. However, the firm believes that the ARPU of the companies will increase substantially in the coming months.

"On the average revenue per user (ARPU), we do believe that tariff hike is imminent for Bharti Airtel. The management in its call had said they believe that industry tariffs can actually move towards Rs. 200 in the next 12 months, and to Rs 300 over a longer period of time to make a sufficient return on investments," Soni added.

He added that the ARPU of telecom companies will improve close to 170 to 180 levels in the next 12 months via increasing tariffs and converting 2G users into high-end plans of 4G plans.

Airtel Fundraising Plans

This comes soon after Airtel announced its plans to raise money to clear all dues and making an investment in 5G networks. The telecom operator announced that it is planning to raise Rs. 21,000 crores.

It is worth noting that the balance sheet of Airtel is very strong in terms of cash availability, which is why raising money via the right issue seems a positive move and is expected to help the telco.

 

However, one should not forget that Reliance Jio has 441 million customers, and is leading in terms of market share and users. This is why we believe Jio's balance sheet is the strongest and the weakening of Vi is likely to help the former a lot.

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