Vodafone India’s IPO (initial public offering) to mobilize around $2-$2.5 billion can negatively impact existing telecoms especially as mobile operators seek additional spectrum in the upcoming auctions for both 4G services and voice services.

Macquarie said in a report that India’s telecom sector is in a state of flux as the shift from 2G and 3G to 4G gains momentum.

The upcoming launch of Reliance Jio Infocomm is likely to raise competitive intensity manifold, as India is arguably the last available growth market of this scale for data consumption. M&A (merger and acquisition) activity has sped up as a result.

The reference was to incumbents Bharti and Reliance Communications on a spectrum-buying spree.

Macquarie downgraded Bharti Airtel and Idea Cellular to neutral last week, in view of the stocks’ recent run-up, lack of positive triggers and concerns over upcoming 700 MHz spectrum auction. Vodafone’s IPO plans may add some more to the downside risks.

“We prefer Bharti Airtel to Idea Cellular,” said Macquarie.

In line with the telecom industry, Vodafone India’s average revenue per user (ARPU) has been declining, driven by weaker pricing and the thrust to grow volumes to capture the country’s smartphone adoption boom.

The IPO has been in the pipeline for many years, and even recent reports pegged it for mid-2017. However, Vodafone may be accelerating it as next year could see maximum competition due to a phased launch of Reliance Jio Infocomm over the second half of this 2016, said Macquarie on Tuesday.

The report from  Macquarie is important at a time when the India government is not willing to cut down on the base price of spectrum for the auction in July.