The shares of Bharti Airtel surged over four percent to hit a fresh 52-week high on Wednesday after reports suggested the telco is mulling collaboration with handset makers to bring down the effective price of a smartphone.

Airtel shares were changing hands at Rs 720.90 at the time of writing, up over four percent. The shares have crossed the Rs 700 threshold for the first time.

According to an Economic Times report, Airtel is considering co-branded deals with handset makers and bundled data and voice offers to bring down the effective price of a smartphone, as the company seeks to solidify its 12 crore 2G subscribers ahead of Reliance Industries’ JioPhone Next launch.

This comes as Reliance postponed the launch of its JioPhone Next. Powered by Google, JioPhone Next is expected to be the most affordable 4G smartphone.

“Airtel has been in a very significant rerating move of its own. The news development that the Jio smartphone is probably going to be delayed is going to give it another window to take on some sort of market share gains that it has been steadily inching upon,” market expert Prakash Diwan told CNBC-TV18.

Airtel is also vying for the satellite internet space in India, joining the likes of Elon Musk and Tata Group. Earlier in June, Sunil Mittal-run Bharti Group became the largest shareholder in the OneWeb, the satellite internet company. The Group, along with UK Government, had rescued the satellite company from the brinks of bankruptcy last year.

The telecom company is also preparing to roll out 5G services in India. The services will be launched next year, and the company has started trial sessions already.

Bharti Airtel is also planning to raise up to Rs 21,000 crore via rights issue. Only the company’s existing investors can participate in the rights issue. For Airtel, Diwan, says this could become a significant war chest.

“The second thing you can look at is the internet solution through satellite route. And the 5G start, something they are preparing themselves for, along with this rights issue is going to be a significant war chest. It kind of very clearly gives out call that Bharti is going to take the fight head-on and for once everybody is starting in the same way for 5G developments,” Diwan added.

“So my sense is Bharti will probably see a very significant rerating going forward,” he said.

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By Marek

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