Indian cellular operators Reliance Jio and Bharti Airtel to increase their combined revenue market share for private telecom operators to 80%-82% in 2022, from around 77%-78% in June 2021, said the credit rating agency Fitch Rating.
According to the report, the rival Vodafone Idea has rapidly lost market share because of its weak balance sheet and limited financial flexibility. It has lost about 180 million subscribers in the past three years. It had 253 million subscribers at end-September 2021.
"We expect the FY22 Indian wireless EBITDA to increase by 30%-33%, led by 15 million subscriber additions and tariff improvement of around 15%. Bharti increased headline tariff by 20%-25% on prepaid plans effective from 26 November 2021," the report said.
In 1HFY22 Indian mobile revenue increased by 10% YoY and EBITDA 40%, on a pre-Ind AS 116 basis, supported by a 7% rise in monthly average revenue per user (ARPU) to INR153 (USD2.1) and high monthly data usage of around 19 GB per user, one of the highest globally.
According to Fitch, the Indian government has taken several reforms leading to a lower regulatory risk for Indian telcos: the decision to defer AGR and spectrum dues for four years, the prospective exclusion of non-telecom revenue from the definition of AGR, the abolition of spectrum usage charges on future spectrum auctions and the increased tenor of future spectrum assets to 30 years instead of 20 years. These regulatory actions will boost Bharti's cash flow.
"We believe that Capex on 5G infrastructure in 2022-2023 will replace current 4G Capex, as 4G coverage is largely complete," it said.