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Supreme Court delivered the critical verdict related to AGR and allowed telcos to pay the AGR dues in a staggered manner over ten years. The Court also asked telcos to pay 10% of AGR dues before March 31, 2021. Airtel’s current outstanding AGR due amount is Rs.25976 crore right from the initial Rs.43989 crore dues. At the same time, Vodafone Idea has a staggering current balance of Rs 50,399 crore from its initial Rs.58000 crore.
With almost 24 years of history, Bharti Airtel is the second-largest mobile network operator in India. It brought 4G network in 2015 and started 5G trials from 2018 itself. The company also owns a majority stake in Bharti Infratel which owns most of the cellular tower infrastructure in India. On the other hand, once India’s largest telephone service provider, Vodafone-Idea got hit hardest because of AGR dues. Falling subscriber base, low 4G implementation/presence and promotor’s unwillingness to put in more money, shows a painful journey ahead for Vodafone-Idea.
Good management, consistent leadership and high brand value are some of the critical points for Airtel. Its CEO recently forecasted an increase in Avg Revenue per User (ARPU) to Rs.200 a month from the current Rs.157 and also the need to increase the data prices. At the same time, Voda-Idea’s ARPU fell to Rs.114 in June quarter from Rs.121 in the last quarter of FY 2019-20.
Airtel posted a net loss of Rs.15933 crore in June quarter, while its consolidated revenue grew by 15.4% YoY. AGR dues of Aircel and Videocon whose spectrums are currently being used by Airtel will keep haunting for a while till NCLAT decide on who will pay for it. Due to COVID-19 led digitisation and the company’s plan to increase the tariff prices, Airtel expected to generate higher revenue in coming quarters. With the ill-financial state of Voda-Idea, Jio and Airtel will likely dominate the Indian Telecom segment.
We are expecting a flat movement on the stock with a downside bias. Those holding for longterm can avoid any fresh addition on this stock.
While in Idea we are Expecting same type movement like Airtel. The chart seems to sell on rising for both Candidates.
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