According to the latest Trai data, Reliance Jio added 1.5 million users while Vodafone Idea continued losing subscribers. Vodafone Idea lost 4.6 million subscribers in the month. BSNL, on the other hand, gained 78,252 users. The wireless subscriber base of Jio now stands at 404.1 million. It is 326.6 million for Airtel, and 295.5 million for Vodafone Idea.
Bharti Airtel saw strong (3.8 million) gross subscriber additions for the third straight month, recouping 10 million (after a cumulative loss of 12.4 million during the lockdown). It added 3.8 million active subscribers (v/s 2.3 million in Aug’20) to reach 316 million in Sep’20. Subsequently, its gross/active SMS increased by 30bp/40bp MoM to touch 28.4 per cent/33 per cent, Motilal Oswal Securities said in a telecom sector update.
Meanwhile, on Wednesday, December 2, 2020, Bharti Airtel hiked its stake in Bharti Infratel through its subsidiary via open market. Bharti Airtel’s wholly-owned subsidiary Nettle Infrastructure Investments Ltd bought 133 million shares or 4.94 per cent additional stake in Bharti Infratel for Rs 2,882 crore via block deals. With this acquisition by Nettle, the aggregate shareholding of Bharti (along with subsidiaries) has increased to 41.66 per cent in Infratel against 36.73 per cent, earlier.
In a note, Motilal Oswal Securities said that the deal could be leverage neutral for Bharti Airtel as it would receive a cumulative Rs 250-300 crore dividend, excluding taxes, over the next two years against its investment of Rs 2,880 crore coming from part of the extra-ordinary dividend from the cash balance on Bharti Infratel’s balance sheet, and the annual profit after tax generation from the merged entity. "However, irrespective of the deal, its existing 36.73 per cent stake would have still received the dividend. So, the incremental amount for the additional around 5 per cent stake does not justify the risk," the brokerage firm said.
“Strong 4G subscriber additions, ARPU (average revenue per user) growth despite seasonality, free cash flow (FCF) generation and rebound in the Africa business are all clearly indicative of Bharti’s superior prowess. With a clarity on the AGR (adjusted gross revenue) front, there are two key triggers that shall help in driving the stock going forward; 1) tariff hike and 2) clarity on timelines and quantum of 5G capex,” analysts at Emkay Global Financial Services said in September quarter result update.
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