Airtel is likely to gain from Vodafone-Idea's downfall. In fact, the second-largest telecom operator might increase its share by 62 percent in the near term due to the financial woes of Vodafone-Idea as per brokerage firm Credit Suisse.
Share Price Of Telecom Operators In Near Term
The brokerage firm believes Vodafone-Idea's financial condition is unlikely to improve without Government support or measures. Besides, the brokerage firm said that Airtel shares are likely to meet Rs. 775, whereas Reliance Jio shares are expected to meet Rs. 2,020. On the other hand, the firm has fixed a target of Rs. 6 for the Vodafone-Idea.
"Airtel is well placed in either of the scenarios: a two-private operator sector or three private operators post industry repair...the company will also emerge as one of the key beneficiaries of the relief measures...," said Credit Suisse.
According to Credit Suisse if Airtel and Reliance Jio will remain in the industry, then the former might increase its market share to 40 percent and average revenue per user (ARPU) to Rs. 200 in the coming months.
In addition, the firm said that the good days for the telecom sector are coming, even Reliance Jio and Airtel will remain in the industry. Additionally, Sunil Mittal-led Airtel will grow as the Government is working on a relief package.
Vodafone-Idea Review Petition In Supreme Court
Meanwhile, ailing telecom operator filed a review petition in the Supreme Court. Notably, the telecom operator wants the apex court to reconsider its decision on AGR dues. Earlier, the petition was dismissed by the court and asked telcos to clear AGR dues.
Airtel, Vodafone-Idea, and Tata Teleservices believe that there are some errors in the Department Of Telecommunication calculations. Vodafone-Idea also said that they are not fly-by-night telecom operators. They want to show DoT calculations errors and if everything goes well, then they might get some relief.
"My dues are Rs. 58,000 crores, we are about to go under, our debts are 1.8 lakh crores. Let us place our calculations before DOT, let DOT take a call," it added. It is important to note that the survival chances of Vodafone-Idea are very less, in case it did not receive support from the ministry.