The brokerage further notes that the pricing status quo is net positive for Jio and Bharti and negative for Vodafone Idea (which is desperate for a price hike to stem cash burn). "Jio has reached the number 1 position and no longer requires a price cut. Bharti has no pressing cash flow challenges. We expect Jio and Bharti to hold the line on pricing in the near term. Vodafone will continue to burn cash," analysts at the brokerage firm note.
As regards Vodafone Idea, the brokerage said the telecom company's woes are likely to continue. It notes that Vodafone Idea lost nearly 4 million users in July and it lost customers for nine months in a row. "AGR case outcome did not bring relief and increased cash flow pressures. A 10-year payment window for a $7 billion AGR payment will need a large equity infusion. Investment from US telecom companies and Internet companies are "moon shots" requiring an appetite for years of billion-dollar losses," Bernstein said.
At 11:11 AM, the stock was trading 0.62 per cent lower at Rs 428 on the BSE as compared to a 0.25 per cent rise in the S&P BSE Sensex at 40,660 levels. Bernstein assumes the continued, weakened presence of Vodafone Idea in the market, with Bharti's revenue share reaching nearly 31% and modest price rises to reach an ARPU of Rs 285 by 2025.
Bharti Airtel is slated to release its September quarter numbers on October 27.
Analysts at Emkay Global expects Bharti Airtel to post net sales (revenue) of Rs 24,716.1 crore, up 17 per cent YoY and 3.2 per cent QoQ while net loss is expected to narrow to Rs 107.3 crore against Rs 23,044.9 crore in the year-ago period.
"EBITDA margins shall expand only 11bps sequentially, due to Covid-19-related cost saving in SG&A coming back in the base. The Africa business should witness a 3 per cent sequential revenue rise on the back of a low base due to currency devaluation," the brokerage said in a result preview note.
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