Jio and Airtel Identified as Direct Investment Paths for India’s Digitalization by CLSA 

Reliance Jio and Bharti Airtel, as prominent telecom operators in India boasting extensive user bases, represent direct investment avenues for those seeking to capitalize on the country’s digitalization, according to global brokerage firm CLSA. Both companies have embarked on the deployment of 5G services, aiming for rapid nationwide coverage. The impending Initial Public Offering (IPO) of Jio is anticipated to serve as a catalyst for the revaluation of Bharti Airtel’s stock. 

Jio, positioned as the largest telecom operator in India, operates as an unlisted entity under Reliance Industries Limited (RIL). Notable investments from major firms like Meta and Google have been made in Jio. CLSA has assigned a buy rating to both Jio and Airtel. Given Jio’s unlisted status, investors can gain exposure to the company through investments in RIL. 

Despite Jio’s significantly larger subscriber base, Airtel boasts a higher average revenue per user (ARPU). In fact, Airtel stands out as the sole telecom company in the country currently earning over Rs 200 per customer on average. Bharti Airtel’s medium-term ARPU target for its India mobile business is set at Rs 300. 

The advent of 5G is expected to serve as a substantial revenue boost for both companies in the medium-to-long term. Both telecom operators have introduced 5G Fixed-Wireless Access (FWA) services in the country. Jio’s Jio AirFiber (5G FWA) has reached 262 cities, while Airtel currently offers it in two cities—Delhi and Mumbai. 

CLSA highlighted Bharti’s prowess in efficient capital allocation as a strength, anticipating a superior return on capital employed (ROCE) for Airtel. The brokerage foresees an annual operating cash flow of USD $10 billion by FY26 for Bharti Airtel. 

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