Airtel, Reliance Jio and Vodafone Idea To Delay Tariff Hikes

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ICICI Securities says that the telecom operators Delay Tariff Hikes.  he telecom tariffs ahead of the floor price recommendations from the Telecom Regulatory Authority of India (TRAI). The firm says that TRAI might view tariff hikes as the industry’s ability to act without policy intervention, a move that ICICI Securities believes would work against telecom operators on floor price recommendation. The telecom operators in India including Bharti Airtel, Reliance Jio, and Vodafone are going to Delay Tariff Hikes. The companies have fix subscription charges for voice calls apart from data prices.

Delay Tariff Hike

Ram Sewak Sharma, chairman of TRAI says that any discussion on floor prices will happen after the lift of the lockdown. ICICI Securities said that the telecom operators will continue to witness organic growth in average revenue per user (ARPU) due to an increase in 4G penetration and “limited drag from the competitive intensity.” The firm said that 10 million 4G subscribers would increase the ARPU by Rs 3 and that the telecom operators require additional tariff hike to reach Rs 200 ARPU. Gopal Vittal, managing director of Bharti Airtel, said in the earnings call on May 19 that he is hopeful of hitting Rs 200 ARPU in the short term and eventually reach Rs 300.

Delay Tariff Hike. 

ICICI Securities said that the telecom operators will wait until the floor price recommendations of TRAI before hiking the tariffs.

“Floor price can be game-changer policy intervention as this may help the industry reconstruct pyramid structure (from almost flat industry structure now) which will help maximize revenue on mobile services, and reduce risk of pricing retraction,” ICICI Securities said in a report. Delay Tariff Hike.

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