New Delhi: The Supreme Court's decision to allow telcos to pay outstanding dues over 10 years will not be enough to help Vodafone Idea to stabilise its position, while Jio and Airtel are expected to strengthen their market shares through subscriber gains, Fitch Ratings has said.
It further said another tariff hike of at least 20 per cent is probable in the next 12 months.
Vodafone Idea's plan to raise funds through a mix of equity and debt is "unlikely" to restore its competitive position and reverse subscriber losses, as the amount would not be sufficient for capex, it argued.
"We believe Vodafone Idea will gradually lose market share given its weak balance sheet and limited financial flexibility," a Fitch release said, adding that Jio and Bharti, on the other hand, are expected to gain market share on the SC verdict.
Industry tariffs are expected to rise as users adopt higher-price 4G plans.
"We expect Jio and Bharti to increase their combined revenue market share to 75-80 per cent from around 70 per cent in the next 12-18 months, at the expense of Vodafone Idea, which will likely lose 50 million-70 million subscribers in the next 12 months; it lost about 155 million subscribers in the last nine quarters," it said.
Reliance Jio could snap up more than half of Vodafone Idea's subscriber losses, with the balance going to Bharti, the release added.
While Jio had posted Earnings before Interest Tax Depreciation and Amortisation (EBITDA) growth of 55 per cent, and Bharti reported Indian mobile EBITDA growth of 35 per cent in the first quarter of the current fiscal, Vodafone Idea's numbers remained stagnant, covering only half of its interest cost.
Read more:Vodafone Idea is now Vi: What changes for existing customers?