Vodafone Idea’s focus on improving network quality after a successful fundraiser could slow subscriber additions for Bharti Airtel and Reliance Jio, according to S&P Global Ratings.

Jio and Airtel have been gaining subscribers at Vodafone Idea's expense since the latter’s market share dropped from 35-40% to 19% due to poor network quality and weak cash flows.

As of the January-March quarter, Bharti Airtel had 352 million subscribers, Jio had 482 million, and Vodafone Idea had 213 million.

Analysts expect Vodafone Idea to lose 2 million subscribers in the April-June quarter, while Airtel and Jio could each add 4-6 million.

The recent increase in tariffs, ranging from 10% to 27%, is anticipated to boost profits for telecommunications firms, signaling a transition to a market with three main competitors.

S&P believes Airtel and Jio may now focus on returns rather than market share gains, with steep spectrum costs and regulatory shifts being crucial for the sector's long-term viability.

“A stabilized three-player market will likely boost earnings. We believe Bharti Airtel and Reliance Jio may now focus on improving returns. This would be a shift from their prior stance of market share gains. Vodafone Idea's recent equity raising will likely let the telco fortify its network and narrow the quality gap with the other incumbents. It could make Vodafone Idea a more viable competitor, and thus a less attractive target,” the report said.