Bharti Airtel is now probably enjoying his time in the unforgiving Indian telecom market. The same cannot be said of its rival, Vodafone Idea (Vi), which has struggled to make ends meet. Bharti Airtel is in a golden position given the developments. The telco’s deal with Google was approved by the CCI (Competition Commission of India) on June 30. This means that Google now owns 1.28% of Bharti Airtel, for which it has paid $700 million.
Airtel has also elected to defer additional adjusted gross revenue (AGR) due to periods up to FY2018-19 for four years, from FY2021-22 to FY2024-25. It will save Airtel thousands more crores in the medium term.
Most importantly, Airtel has generated free cash flows and made prepayments to the Department of Telecommunications (DoT). While Airtel is still in debt, the company is just as good as Jio’s when it comes to making money.
What Airtel has done quite well isn’t just its mobile business. But the telco is also in other industries, such as banking and B2B. All of these verticals pay Airtel back quite well. Airtel Payments Bank has already turned profitable and is now generating free cash flow for the Bharti Group.
Second round of telecom reforms coming soon
The DoT is expected to announce new reforms for the sector soon. These reforms will help both Airtel and other telecom companies. Given Airtel’s current position, the more aid that comes, the better and faster the company will grow.
Airtel is not in the position that Vodafone Idea is. The telco only thinks about profit, while Vodafone Idea only thinks about survival. In an idealistic scenario, if things continue for Airtel as they are now, the telco will soon become unbeatable, and Jio will face really tough competition from Airtel for being the largest telco in India.
