Fitch Ratings has affirmed Bharti Airtel’s long-term Foreign-Currency Issuer Default Rating (IDR) and senior unsecured rating at BBB-. The Outlook on the IDR is Stable.

The credit rating agency has also affirmed the ratings on Bharti Airtel International’ senior unsecured bonds at BBB-.

Airtel’s ratings are supported by its diversified and integrated business profile, with operations spanning the mobile, fixed-line, digital TV, tower and enterprise sectors in India as well as mobile operations in 14 African markets.

Airtel has held on to its Indian mobile revenue market share of around 31-33 percent despite competition from Reliance Jio and Vodafone Idea.

Fitch Ratings said the stable outlook for Airtel reflects its expectations of a recovery in its Indian mobile segment and growth in Africa and the enterprise segment.

Fitch Ratings forecast FFO adjusted net leverage to improve to 2.1x-2.3x in the financial year ending March 2020 (FY20) from 2.4x at FYE19, excluding $6.1 billion in deferred spectrum costs, after Airtel raised $3.5 billion from a rights issue in June 2019.

Airtel is expected to repay debt using the proceeds from an equity issuance worth $750 million by its African subsidiary and the sale of a stake in the combined Indus Tower and Bharti Infratel, both in 2HFY20.

Airtel also raised $1.45 billion by selling stake in its African subsidiary and used the proceeds to reduce net debt. Fitch Ratings said leverage may increase to 2.4x-2.5x in FY21 if it were to make a large upfront payment for 5G spectrum assets during the 5G spectrum auction in 2019 or early 2020.

Fitch Ratings said EBITDA contributions from its African and Indian non-mobile businesses increased to 31 percent and 34 percent, respectively, in FY19 from 22 percent and 28 percent in FY18.

Fitch Ratings said Airtel’s FY20 revenue and EBITDA are expected to increase by mid-single-digit percentages, driven by better average revenue per user (ARPU) in the Indian mobile segment and steady growth in the African and business-to-business (enterprise) segments.

Indian mobile EBITDA are expected to increase by 15-20 percent, driven strong growth in data usage and higher blended ARPU as competition eases and the incumbents focus on profitability.

Indian mobile EBITDA rose 32 percent and the EBITDA margin expanded by 500bp quarter-on-quarter to 24 percent as ARPU increased to INR123 or $1.7 during 4QFY19 from INR104 in 3QFY19.

Indian telcos’ credit profiles are expected to improve due to a recovery in industry tariffs and incumbents’ strategy to partially repay debt through equity injections and sale of non-core assets, Fitch Ratings said.

Blended average tariff will rise by 5-10 percent during FY20, driven by the introduction of a minimum mobile tariff of INR35 or $0.50 per month and growing data use as affordable smartphones proliferate in the industry.

FY20 Capex/revenue will remain high at 34-36 percent with forecast Capex of around $4 billion, as Airtel will continue to invest to strengthen its 4G network infrastructure and invest in fibre infrastructure.

Airtel India CEO Gopal Vittal earlier said the company’s core Capex, excluding deferred spectrum payments, has peaked and will decline significantly in fiscal 2020.