According to Moody’s, the potential clearance of past-due fees of Bharti Airtel weighs on its credit profile. Further, it added that the deferment on the spectrum is not a long-term solution and Airtel would not get much respite if the telco continues to spend despite spectrum moratorium and price tariff hikes.
The loss of subscribers or higher churn rates would offset the benefits of price increases, as per Moody’s.
Airtel may plan to design various price increases across its subscriber base aiming at sustainable increase in average revenue per user (ARPU) from the current amount of Rs 128.
The annual spectrum payments of Airtel is worth Rs 60 billion, which translates into around Rs 120 billion of payment relief over the next two years, the firm added.