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Airtel’s and Vodafone Idea’s EBITDA diverge as Jio continues to gain market share, says Fitch Ratings

August 05, 2019
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According to Fitch Ratings, Bharti Airtel’s and Vodafone Idea’s earnings before interest, tax, depreciation and amortisation (EBITDA) is increasingly diverging as Reliance Jio is gaining market share and growing in terms of revenue and EBITDA.

Fitch Ratings noted that Airtel’s consolidated revenue improved by 5 per cent year-on-year (YoY) while EBITDA increased by 2 per cent during the first quarter of FY 2019-20. The improvements in Airtel’s revenue were driven by continued growth in Africa, where revenue and EBITDA increased by 7 per cent and 13 per cent, respectively, on subscriber growth of 9 per cent and stable ARPU.

On the contrary, Vodafone Idea's revenue and EBITDA during the first quarter of FY 2019-20 declined by 4 per cent and 22 per cent, respectively, as it lost 14 million customers. However, Vodafone Idea's ARPU improved by 4 per cent to Rs 108 as it gained 4 million 4G customers. Vodafone-Idea's EBITDA of Rs 12 billion was driven by cost synergies from the merger of the two companies.

Meanwhile, Reliance Jio’s revenue and EBITDA increased by 44 per cent and 37 per cent YoY, respectively, during the first quarter of FY 2019-20, as it gained about 25 million customers. Also, Reliance Jio's ARPU, which does not include interconnection revenue, was largely flat at around Rs 122.

 

 
 
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