"We expect the government to provide relief to this debt-ridden sector and hence positive tailwinds," Bank of America-Merrill Lynch said in a report.
The broking house said Indian telcos received negative decision on 14-year AGR definition, regarding calculation of licence fees owed to the government.
BoA-ML also said Bharti had partly factored a contingent liability. "We find Reliance Industries' subsidiary Jio well placed to capitalise on competitors' weakness. Jio could end up having a first mover advantage on 5G, if these penalty payments impact incumbent telcos ability to invest," it said.
Morgan Stanley said the apex court had ruled in favour of the government on the AGR issue.
"While the fine print of the ruling is not available yet, the news flashes have been stating that adjustments to interconnect usage charge (IUC) and roaming revenue will only be allowed from gross revenue for the calculation of AGR, and that telcos will have to pay interest and penalties as well on the contested amount. Though the court has not laid down a deadline for the payment of dues, telcos could be provided a six-month time to calculate the final impact," it said.
"We understand the telcos still have the option to appeal. But if the telcos were to eventually pay as per the ruling, the potential payments could be $3 billion for Airtel and $4 billion for Vodafone-Idea," the report said quoting the amount from a media wire numbers.
In a setback to telecom service providers, the Supreme Court on Thursday allowed the Centre's plea to recover Rs 92,000 crore AGR from them. A three-judge Bench upheld the definition of AGR formulated by the Department of Telecom (DoT).
It said the service providers would have to pay penalties and interests to the DoT. The Bench made it clear that there would no further litigation on the issue and it would fix a time-frame for calculation and payment of dues by the telcos.
( With inputs from IANS )