When it comes to the telecom sector in India, two players continue to battle it out for market share. These include Reliance Jio and Bharti Airtel. But for global brokerage firm Jefferies, Airtel is still a better bet.
According to the brokerage firm, “Bharti Airtel remains our top pick.” The recommendation comes at a time when Jio is adding more users, Vodafone Idea is battling AGR repayment concerns, and the sector is seeing record churn after recent tariff hikes.
But what makes Bharti Airtel stand out, even when Jio continues to dominate in subscriber additions?
Let’s take a look at the rationale behind Jefferies call and what it means for investors tracking the sector.
Jefferies on Telecom Services: Active subscriber growth slows down
According to the brokerage report, July saw a sharp moderation in active subscriber additions, which rose only by 0.5 million. This came after a strong 10 million jump in May and June. The report noted that “active subscriber base rose by 0.5m to 1,083m” during the month.
Jio continued to lead the pack with over 2.0 million active subscribers, while Airtel followed with over 0.8 million. In contrast, Vodafone Idea’s subscriber decline extended into the 20th straight month, shedding another 1.0 million users.
Jefferies on Telecom Services: Where Airtel is gaining
As per the brokerage report, Bharti Airtel’s subscriber gains were not evenly spread. Jefferies noted that “subscriber additions were concentrated in 11 out of 22 circles” with most gains coming from Metros and A circles. But the concern is persistent weakness in Bharti Hexacom’s markets such as Rajasthan and the North East, which have now seen subscriber losses for four consecutive months.
This trend, according to Jefferies, “may post risks to our FY26 estimates.”
As per the report, the industry added 3.6 million 4G and 5G users in July. Reliance Jio (added over 2.7 million) and Airtel (over 2.4 million) dominated here, expanding their combined share to 83% of the data market.
As the report put it, “Bharti and Jio added 10bps data subscriber market share taking their combined market share to 83%.”
Jefferies on Telecom Services: Where Jio has an edge
One theme that stood out in Jefferies assessment is Jio’s consistent edge in winning new active users. The firm said, “Jio added more active subscribers than Bharti for the 5th straight month.” This, according to the brokerage, bodes well for the overall tariff outlook, as sustained competition often pushes operators towards price revisions.
Over the past year, Jio’s active subscriber market share climbed by 150 basis points to 43%, while Airtel’s slipped by 30 basis points to 36%.
Jefferies on Telecom Services: Vodafone Idea’s struggle continues
The third major player, Vodafone Idea, continues to bleed subscribers. Even though it managed to add 0.2 million 4G customers in July, it still lost 1.0 million active users overall.
Jefferies pointed out that “Vodafone Idea’s subscriber decline remains volatile” but somewhat moderated compared to last year.
Another trend to watch is mobile number portability (MNP) requests, which hit a record 15 million in July. Jefferies observed that “higher churn usually drives up dealer commissions/SG&A expenses for telcos.”
Jefferies investment call: Airtel is still on top
Despite Jio’s stronger subscriber additions, Jefferies believes Airtel is better placed for long-term value.
As per the report, “While active subscriber additions moderated, data subscriber additions remain healthy which is positive for ARPUs…Bharti Airtel remains our top pick.”