Airtel vs Jio: Race is wide open

Jio has scope to catch up Bharti Airtel's Arpu is ahead of Reliance Jio's, but it lags on subscriber base.

- Manish Joshi

Investors who wish to bet on India's telecom sector have few pure-play options until Reliance Jio Infocomm is listed as a separate company. For now, tariff hikes have lifted all boats as far as the average revenue per user (Arpu) is concerned.

Vodafone Idea Ltd's Arpu rose by ₹7 sequentially to ₹173 in the December quarter (Q3FY25) on a subscriber base of 200 million. However, it still makes losses. With nearly ₹2 trillion of debt, a significant portion being government dues, Vodafone Idea will spend most of its future cash flows on repaying this, even if its profitability improves. This leaves little on the table for shareholders. Plus, its equity base continues to expand with frequent dilution. There's hope the company will get some relief from the government in the form of a debt waiver, but this appears unlikely as of now.