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Competition in telecom sector going to ease by 2019, says Fitch

November 19, 2018
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According to Fitch, the competition level in the telecom sector is going ease significantly by 2019 and the blended average revenue per user (ARPU) is going recover by 3-5 per cent through 2019. This is because Reliance Jio Infocomm Limited (RJIL) is expected to pursue a less aggressive pricing strategy during the calendar year, 2019.

In the future, Fitch expects RJIL’s revenue market share (RMS) to grow steadily at 30 per cent. Such a scenario would lead to the emergence of three equal sized operators namely Bharti Airtel, RJIL and Vodafone Idea Limited (VIL) holding 93-95 per cent RMS by the end of 2019.

However, Fitch expects the competition to intensify in the home broadband segment with RJIL all set to launch its ultra fast fibre-to-the-home services nationally under the GigaFiber brand.

Further, Fitch expects the older incumbent carriers to raise equity and monetise their tower assets in order to strengthen their stretched balance sheets shortly.

Moreover, Fitch believes that Bharti Airtel BBB-/stable rating headroom would remain low, despite the near $1.25 billion capital raised by the partial sale of its Africa unit last month.

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