Billionaire Sunil Mittal's Airtel is faltering with Mukesh Ambani's Reliance Jio

NEW DELHI: In A War For The Control Over The Billions Mobile Market Of India, Tycoon Sunil Mittal Seems To Be Splattering In The Face Of A Moloch Unleashed By Him Mukesh Ambani .

For At Least A Fourth Quarter In A Row, Mittal's Bharti Airtel Ltd. Achieved His Profit With One-time Profit And Masked Headwind By Preparedness Reliance Jio Infocomm Ltd. Jio’s Roll-out, After Its 2016 Debut, Has Knocked Airtel From Its Perch In A Consolidation That Shrank The Industry To Three Players From About A Boxes Four Years Ago.

Airtel Is Struggling To Add Subscribers In A Saturated Market After Jio Managed To Lure More Than 300 Million Users Over The Past Three Years - A Quarter Of The World's Second-largest Market. The Aggressive Expansion Of Jio With Free Calls And Cheaper Data, Backed By The Deep Pockets Of Asia's Richest Man, Was Bad News For Highly Indebted Incumbents Engaged In A Tariff War That Had Pushed Call Rates To Less Than A Cent.

Shriveling Earnings Portend Further Trouble For Airtel. Already Saddled With More Than $ 17 Billion Of Debt - The Highest Among Asian Peers - It's Also Preparing To Spend More On 5G Airwaves At A Government Auction In Coming Months. Adding To Its Woes, Moody’s Investors Service Cut Its Rating To Junk Earlier This Year.

The New Delhi-based Company Is Counting On Some Asset Sales, A Rights Issue And An Initial Public Offering In London Or Its Africa Unit To Bolster Its Finances.

“Airtel's Profit Will Suffer Until Jio Is Ready To Raise Prices. It's Hard To Say When, But Jio May Remain Aggressive Until It Achieves The No. 1 Spot In Mobile Revenue. In The Meantime, Airtel Is Trying To Weather Through Preserving Margin At Sacrifice Or Subscriber Loss, Divesting Assets To Ease Debt Burden, And Raising Equity To Avoid A Credit Downgrade, ”said Anthea Lai, Telecom Industry Analyst.

Shares Of Airtel Declined 2.2 Per Cent On Tuesday, Making The Stock The Worst Performer On The Benchmark S&P BSE Sensex For The Day.

Airtel Said In An Exchange Filing On Monday That A One-time Net Gain Of Rs 2,020 Crore ($ 291 Million) On An Account Of A Credit Related To" Re-assessment Of Levies" Boosted Its Net Income To Rs 110 Crore For The Quarter Through March . Analysts Had Predicted A Loss Or Rs 966 Crore.

Although Revenue Rose 6 Per Cent To Rs 20,600 Crore In The Period, Data Provided By The Telecom Regulatory Authority Of India Show Airtel Added A Net 53,493 Subscribers In The First Two Months Of The Year, Compared To Jio's 17.1 Million. While Airtel Did Not Provide User Additional Data For The Quarter, Jio Reported An Increase Of 26.6 Million.

Airtel's Average Revenue Per User In India Was Better Than Jio's, But Lagging Revenue Growth Suggested It Needs" To Review Its Subscriber's Ramp-up Strategy," According To A Research Note From Rajiv Sharma And Anshul Agrawal, Analysts At SBICAP Securities Ltd.

In An Interview With BloombergQuint Earlier This Year On The World Economic Forum In Davos, Mittal Described Conditions In India's Hyper-competitive Telecommunications Market As" Dreadful" Predicting A Possible Turning Point This Year" This Will Be The Year Of Perhaps Hemorrhaging Stopping," He Said.

Airtel Has Become Number 2 In The Industry Last Year Idea Cellular Ltd . And The Local Unit Of Vodafone Group Plc Closed Their Merger To Become India's Largest Operator By Subscribers.

In February, Airtel Unveiled Plans To Raise As Much As Rs 32,000 Crore For A War Chest To Take On Jio As Well As Prepare For The 5G Auction. Or That, Rs 25,000 Crore Will Be A Rights Issue Due To Close May 17 At Rs 220 Per Share, And The Rest Of The Sale Or Perpetual Bonds With Equity Credit. Vodafone Idea Proposes To Raise Rs 25,000 Crore From A Rights Issue.

comments