Bharti Airtel, the former market leader, has shown interest in forging a partnership with Vodafone Idea in a joint venture for owning fibre network to focus on expansion. As per an ET Telecom report, Bharti Airtel and Vodafone Idea, both competitors are ready to bow down for forging a joint venture entity which would own the fibre network and would help drive bolstering growth and better influx for both the companies.
Vodafone Idea and Bharti Airtel Ready for Joint Venture to Own Fibre Network (strategy against jio)
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Vodafone Idea and Bharti Airtel Trying to Raise Funds
The business daily reported a top Airtel official saying, “We will be delighted to share and create one company. We have already built a lot of fibre with Vodafone Idea, and over the past two years, a lot of sharing has happened between the two companies.”
Notably, Indus Towers, the biggest tower company of India is jointly owned by Airtel and Vodafone Idea. Now due to the intense tariff war and the financially draining situations of the industry, both the companies have been resorting to different ways to raise funds to meet their capex and operational requirements. While Bharti Airtel has been selling its stake in the tower unit Bharti Infratel and making private placements of shares of its Africa business, Reliance Jio has set aside all of its fibre assets onto another separate entity and has plans to monetise it.
Airtel Plotting to Regain Top Position
Sunil Bharti Mittal led telco, Airtel, plans to regain its previous rank of top Revenue Market Share (RMS) holder by the end of the current fiscal year. Currently, Vodafone Idea has claimed the top spot with 32.8% RMS, with Bharti Airtel lagging behind at 30.9%. Reliance Jio, on the other hand, has 26.1% RMS as reported by ICICI Securities through the data collected by the industry watchdog, Telecom Regulatory Authority of India (Trai).
Going by the analysts’ opinions, now the telcos will be able to hike the prices as the industry is headed towards stability owing to the consolidation. Also, since all the three telcos now own almost one-third RMS, the focus will soon be on increasing revenue by increasing prices. Another report by ET Telecom had denoted that Airtel is ready to shed off 60-70 million low-end subscribers in a bid to boost its ARPU.
This fact is definitely reinforced when we get to see the current trend in the telecom industry with operators introducing minimum recharge packs to weed out low paying customers and to increase their ARPU.
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