MUMBAI (NewsRise) -- Bharti Airtel and other Indian telecom companies are likely to report yet another quarter of losses in October-December amid intensifying competition with billionaire Mukesh Ambani's Reliance Jio Infocomm.
Reliance Jio, which entered the market more than two years ago, has unleashed a brutal price war to gain market share. The company's strategy of slashing prices has shrunk the revenue of rivals such as Bharti Airtel and Vodafone Idea by 36% since April 2017, say analysts.
According to the Telecom Regulatory Authority of India's data, Reliance Jio added roughly 11 million users in October, while Vodafone Idea and Bharti Airtel lost 7.3 million and 1.8 million users, respectively.
"We expect Reliance Jio to emerge as the leading operator with a 36% revenue market share in the fiscal year 2020, with market-share gains coming largely from Vodafone Idea," CLSA said in a report last month. "This, in turn, could ease tariff pressures in the sector."
Reliance Jio's financial performance in the third quarter will be revealed on Thursday when parent Reliance Industries announces its earnings. HDFC Securities expects the telecom operator to report a 7.1% rise in net profit to 7.29 billion rupees ($103 million) in the quarter. It is also likely to report a 50% jump in revenue to 103.14 billion rupees, the brokerage said.
Jio added 28 million more subscribers in the quarter to take the total number of users on its network to 280 million. Its average revenue per user fell 1% sequentially, according to Morgan Stanley.
Second-largest Bharti Airtel is set to report its results on Jan. 31. The company, backed by billionaire Sunil Bharti Mittal, is likely to report a net loss of 8.35 billion rupees in the quarter, according to Refinitiv data. It is likely to report a marginal 0.5% increase in revenue to 205.48 billion rupees.
Bharti's India revenue is likely to decline by 5.6% to 101.5 billion rupees, according to Kotak Institutional Equities.
To be sure, Bharti's diversified revenue base, including revenue from Africa, digital TV, and enterprise network, is likely to help the company hold steady against Jio's onslaught, analysts said.
Bharti has also taken several steps to bulk up its war chest to take on Jio. It is evaluating various options to raise funds to strengthen its capital structure and balance sheet and also intends to list its Africa business, for which it already received investment commitments of $1.25 billion from a group of investors.
India's largest mobile phone company Vodafone Idea is likely to report a loss of 53 billion rupees in the quarter, Refinitiv data showed. The company is likely to report revenue of 118.7 billion rupees, it said. Vodafone Idea is yet to announce the date of its earnings release.
CLSA warns that the company may lose market share due to the integration of Vodafone and Idea Cellular. The two had completed their merger last year.
--Dhanya Ann Thoppil