“We are the largest wireless operator in the country both in terms of customers and revenues.”

Those words are from Bharti Airtel’s last quarterly earnings report—for the months of October-December 2018. They shouldn’t have been there because the merger of its rivals Vodafone and Idea in September had created India’s new #1 player. Bharti Airtel was #2.

Sometime within the next 12 months, and perhaps in 2019 itself, Bharti Airtel will become #3 as Reliance Jio becomes the new #1.

And yet, counter-intuitively, Bharti Airtel hasn’t been in a stronger position for years. First, the shock of losing its #1 position—something it had held for 15 years—rid it of all the arrogance, passivity and organisational myopia. Losing to an adversary like Jio, which creates its own playbook instead of fighting to the industry’s, has also taught Bharti Airtel to do the same.

And second, the liberation of not being #1 is now giving Bharti Airtel the strategic and operational freedom to adopt contrarian tactics for growth. The markets no longer expect it to behave like an incumbent leader, defending its turf.

This “shock-liberation” is what enabled Bharti Airtel to voluntarily cull nearly 50 million of its own low-value subscribers during the October-December 2018 quarter. (You can read more about it in the first part of this story.)

Instead of being punished for it, analysts appreciated Bharti Airtel. Respected research firms like Bernstein, CLSA and JM Financial have marked its stock as a “Buy” or “Outperform.” Its diversification bets, like a contentious 2010 decision to spend nearly $9 billion to buy an African mobile operator across 15 countries, have now grown to become powerful sources of operational expertise and capital. Bharti Infratel, its telecom tower company is merging with Indus Towers, a peer in which Bharti Airtel has a stake too, to become India’s #1. It, too, is rated a “Buy” or “Outperform” by leading research firms.

This is a reborn Bharti Airtel.

But there can be no phoenix without a fire, and Bharti Airtel will certainly feel the heat as it attempts to regain a position of strength. Jio still has momentum on its side, bottomless pockets, and an unparalleled 4G network to keep its telecom juggernaut rolling. This will not be about overtaking the upstart Jio, but gaining ground or, at least, not falling further behind. And Airtel thinks it has what it takes to do that.

With market leadership comes market expectations

“They (Jio) are fast reaching that point where they have another 5-6 months of headroom left and that’s why their experience is also dipping,” says one of Bharti Airtel’s most senior executives, asking to stay unnamed as the company was in the silent period in the runup to announcing its results for the January-March 2019 quarter.