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Airtel Might Clock Its First Loss In 15 Years As Telecoms Bleed

Bharti Airtel, the market leader, is planned to report an average loss in the financial quarter four concluded in March. This will be the first loss of the company in 15 years. This loss is stung by a mixture of sustained costing attack from Reliance Jio Infocomm, a decision from users to reduce priced packed offers from higher ones, and a slash in global termination rates, claimed analysts.

The losses of Idea Cellular (No. 3 carrier) are also set to expand in the quarter of March, majorly smacked by off-putting operational leverage, they claimed.

Brokerages, on the other hand, are divided over the quantum of Airtel’s expected loss in the quarter of March with Bank of America-Merrill Lynch expecting it at Rs 58.5 Crore, while Kotak Securities looks at the top phone company of the country clocking a net loss near to Rs 377 Crore, also hurt by lowered rates for local interconnect. Bharti Airtel had last clocked a net loss in 2002.

Bank of America-Merrill Lynch expects net loss of Idea to mount additionally to Rs 1,494 Crore in the quarter of March. The Kumar Birla-controlled carrier, which had clocked a net loss of Rs 1,284.5 Crore in the quarter of December, is on the edge of concluding its amalgamation with Vodafone India. Shares of Airtel ended at Rs 401.65 by 1.83% more on BSE, while the share of Idea was slightly low to Rs 77.45 by 0.19%.

Bank of America-Merrill Lynch anticipates “Idea and Bharti Airtel to clock a weak bunch of figures in the quarter of March, and witnesses incomes of both firms staying under stress owing to sustained average revenue per user (ARPU) downtrading and interconnect rate cuts, although the degree is dropping”. Experts look at India cellular revenue of Bharti Airtel dropping by 5% as compared to previous quarter in the middle of downtrading stress, and Idea’s dropping by an analogous level.