Bharti Airtel, Reliance Jio to continue gaining market share due to Vodafone Idea’s worsened financial health

Bharti Airtel and Reliance Jio will continue to gain market share at the cost of Vodafone Idea’s “worsened” financial health that may deteriorate further in the wake of the AGR judgment, Axis Capital said in a note on Friday. Axis Capital said it has trimmed its revenue estimates for wireless telcos. This is because muted subscriber additions as well as hit in 2G/3G conversions to 4G SIMs on account of the lockdown and a possible extension of certain curbs, could partially impact revenue growth that was expected in coming months from the tariff hike in December 2019.

“We cut FY21/22E (estimates) revenue of wireless providers by 1-6 per cent and EBITDA (Earnings before Interest, Taxes, Depreciation and Amortisation) margin by 20-100 bps (basis points,” Axis Capital said in the telecom sector report. It said that while the tariff hikes undertaken by companies in December 2019 is likely to play out in nine months of calender year 2020 as subscribers come for recharge, the floor pricing may be delayed due to the lockdown.