Bharati Airtel-stocknarration

Bharti Airtel Ltd

 
The company was founded by Sunil Bharti Mittal on July 7, 1995, and is headquartered in New Delhi, India and it is the second-largest telecom operator in India.

The main business of airtel is telecommunication, tower infrastructure, and direct-to-home digital television services. It operates mobile services in India, Sri Lanka, Bangladesh, Africa.

It also provides many services like Tower Infrastructure Services, Homes Services, Digital TV Services, airtel, XStream, airtel bank, etc. It is also working on artificial intelligence(AI) which will help in building 5g space.

 The Tower Infrastructure Services segment includes setting up, operating, and maintaining wireless communication towers in India, Barathi Infratel recently merged with Bharati airtel is handling operations of the tower.

 

Impact of Jio on telecom sector and how airtel is effected?

Operator

Started Operations

 

Ceased Operations

Fate

Videocon telecom

2010 

 

2016

Shut down following sale of spectrum to Bharti Airtel 

MTS India

2009

 

2017

Acquired by Reliance Communications 

Idea Cellular

2002

 

2018

Merged with Vodafone India to form Vi 

Vodafone India

2011

 

2018

Merged with Idea Cellular to form Vi 

Aircel

1999

 

2018

Bankrupt 

Telenor India

2009

 

2018

Acquired by Bharti Airtel 

Tata Docomo

2009

 

2019

Acquired by Bharti Airtel 

Reliance Communications

2002

 

2019

Bankrupt 

Mahanagar Telephone Nigam Liited

1986

 

2020

A subsidiary of BSNL until the merger is complete 


The acquisition made by airtel:

 Videocon telecom: On 16 March 2016 videocon telecom shut down by selling its spectrum to Barathi Airtel

 >Telenor Communication Private Limited:

In Feb 2017, Telenor Group announced merging the business with Barathi airtel in a no-cash deal which means Airtel will take over all its spectrum and pay all its liabilities to the government of around Rs 1,600 crore, payable in instalments till 2026.

Tata Docomo:

The company was owned by Tata Teleservices in partnership with NTT Docomo of Japan. On 21 July 2019, all Tata Docomo users are merged with Airtel along with the consumer mobile businesses of Tata Docomo, Tata Teleservices (TTSL) and Tata Teleservices Maharashtra Limited (TTML) has been merged into Bharti Airtel.

 

 Impact of Jio on telecom sector:

Jio entered into the market by offering free 4G services to all its customers. The average revenue per user (ARPU) earned by Jio is very much high as compared to any other operator since it has new technologies. It provided with 4G services and all the operators all other operators were providing with 2G and 3G spectrum which leads to the increase in working capital of the companies.

Before the coming of Jio, there were eight major telecom operators in India but due to competition by Jio, the number of telecom operators decreased to four.

Now there are four major telecom operators in India (Jio, Bharti Airtel, Vodafone  Idea, BSNL) Jio holds a  major market share of 34 %, followed by airtel 28%, Vodafone idea 27.57%, BSNL 10.35% according to the TRAI report in March 2020.

 

 Is Vodafone idea a real competition for airtel?

After merging Vodafone with Idea in 2018 the company then become the largest telecom operator in India with 400 million subscribers. 

But due to the tariff war, the financials of the company is affected by debt so the company could not expand its services, due to this, the subscribers of the Vodafone idea had gone down, resulting in which Jio and airtel gained subscribers.

 Which made India’s largest telecom operator in 2018 to lose its market share from the first position to the third.

Opportunites for airtel: Currently the financials of the Vodafone idea is bad due to debt so it should raise fund or increase the tariff.

‣If the tariff increases, the subscribers of  Vodafone idea will move to Airtel or Jio.

‣if  Vodafone idea did not increase the tariff it will be very hard to sustain with current debt. If anything goes wrong with the Vodafone idea the other two operators will gain its subscribers.

 

Future of Airtel:

 The revenue of airtel is increasing after every quarter, during September quarter’s 22 percent growth in sales for Bharti Airtel was its highest since the June quarter of 2011. The sales numbers at Rs 25,785 crore was the highest ever for the telecom operator.

Due to the coming of Jio to the financials of Airtel had gone down, but the advantage to its shareholders is that the competitors of Airtel also left the market due to which there will be less competition in the market. 

We know that 5G is going to change the future telecom sector, Department of Telecommunications is expected to carry out a 5g spectrum auction in the first quarter of 2021 (April-June) expected.

 

 One year target of Airtel by different brokerages:

Brokers

Target

Kotak Securities

710

Narnolia Financial Advisors

700

Religare Broking

709

 

 
 

Financials:

Time Chart

Leave a Reply

Your email address will not be published. Required fields are marked *