Bharti Airtel was supposed to be a consensus trade – Why is it underperforming?
FTSE Rebalancing – The FTSE World index decided to rejig its weight in a few Indian Stocks due to which Bharti Airtel saw a lot of outflows. Vodafone’s resurrection – Around the same time, clarity emerged post the AGR case closure that the telecom sector was not going to be a duopoly after all and VI is going to survive with a possibility of new investors. This dampened the momentum Airtel had been enjoying.
Jio getting into smartphone manufacturing – Get this – 350 million Indians use a feature phone with a 2G connection – Which forms the crux of the Airtel and VI clientele. Armed to the teeth, Jio has it eyes set on manufacturing 200 million smartphones bundled with a Jio sim.
Jios Postpaid entry – Airtel always had the USP of having the best postpaid customers – They are sticky and contribute to the better margins Airtel enjoyed. Jios cheaper postpaid plans may bleed some of Airtels premium customers.
Delay in tariff hikes – Just like everyone in the OPEC has to raise prices in tandem, something similar is happening in telecom. Any further delay in raising tariffs will exacerbate the bleeding, esp for VI. And it seems, Jio wants tha