Vodafone Idea stock can deliver more returns if debt overhang subsides

Bharti Airtel, however, is the safer bet fundamentally among the two companies.

Recent developments in the telecom space have been especially beneficial for Vodafone-Idea (VI) and Bharti Airtel, vis-à-vis Reliance Jio. While the government relief package includes a four-year moratorium on regulatory payments, the three telcos have gone for roughly 20-25 per cent tariff hikes. This gives VIL breathing space to manage debt, and raise ARPU (average revenue per user). Airtel was less stressed on the debt front. The moratorium would help, and the tariff hike should enable ARPU growth. Airtel may be in a position to start deleveraging in FY24.

VI’s obligations included Rs 22,000 crore in annual instalments towards deferred spectrum