As per Fitch Ratings, Bharti Airtel’s plan of issuing equity worth $2.8 billion will help improve its fund from operations (FFO) net leverage to around 2x and lead to greater availability of funds for strengthening its market position. Airtel has planned to raise equity in three tranches, receiving 25 per cent of the proceeds upfront and the balance in two instalments within a period of three years.
According to forecasts made by Fitch, Bharti Airtel’s capital expenditure (capex) is expected to shoot up to $5 billion in FY22 of which $1.5 billion is likely to flow towards acquisition of 5G spectrum assets. Fitch also believes that Airtel will seek to strengthen its fibre infrastructure, connect towers with fibre and backhaul infrastructure to prepare its network to launch 5G services in 2022-23. The capex on 5G infrastructure during 2022-23 will replace 4G investments as 4G coverage is largely complete, Fitch stated.
Furthermore, Fitch expects Reliance Jio and Bharti Airtel to increase their combined revenue market share to 80-82 per cent among private players, coming at the expense of Vodafone Idea Limited, which it believes is likely to lose 50-70 million subscribers over the next 12 months.
