Hike in tariffs announced by telecom operators on Sunday is expected to have an increase in their Operating profit of Bharti Airtel, Vodafone idea and Reliance Jio. Bharti Airtel and Vodafone Idea are making a 30 percent increase in their new plans and it will come into effect on December 3.Where Reliance Jio is planning to increase their tariffs by up to 40 percent from December 6.
Telecom companies are considering the increase in the tariffs as a remedy to improve the average revenue per user (ARPU). The price hikes are the major forces for SIM card consolidation as well as subscriber churn. Various Analysts believe that if these hikes are go on accepting and data consumption trends are sustaining then it will give some confidence for the telecom sector along with that Credit Suisse believes there will be more price hikes on the upcoming 12-18 months In such case content that are offered and network quality are the relevant factors to be considered for the subscriber retention.The increased in the tariffs for the prepaid plans are being high than what the analysts had actually expected for the re-joining of the entire telecom stocks. The figures showed that Vodafone Idea and Bharti Airtel had gained 7-18 per cent of total trade , while Reliance Jio earned 2.5 per cent of total trade.
Analysts like Naval Seth EGFS on price hike are believing that these increase in tariffs and SIM consolidation are positive for Bharti Airtel and Reliance Jio ,where Vodafone Idea is still in the network integration phase and may continue to lose more subscribers and market shares. Earlier on November 18 ,Vodafone Idea had stated "acute financial stress " in the sector that required it to hike tariff from December. The company had posted losses of Rs 50,921 crores in September 30 , the highest of all time by a corporate in India.
Brokerages believe that Bharti Airtel is having a comparatively safe position and capability of fund raising capacity may help them to have a simple payment system of including Spectrum and AGR liability. Motilal Oswal Financial Service (MOFSL) believes that if Bharti Airtel plans to repay the AGR liability with a mix of both equity and debt which will force the company to soften the 8 per cent equity policy at a price of 10 percent increase in the current market price.
Telecom companies are considering the increase in the tariffs as a remedy to improve the average revenue per user (ARPU). The price hikes are the major forces for SIM card consolidation as well as subscriber churn. Various Analysts believe that if these hikes are go on accepting and data consumption trends are sustaining then it will give some confidence for the telecom sector along with that Credit Suisse believes there will be more price hikes on the upcoming 12-18 months In such case content that are offered and network quality are the relevant factors to be considered for the subscriber retention.The increased in the tariffs for the prepaid plans are being high than what the analysts had actually expected for the re-joining of the entire telecom stocks. The figures showed that Vodafone Idea and Bharti Airtel had gained 7-18 per cent of total trade , while Reliance Jio earned 2.5 per cent of total trade.
Analysts like Naval Seth EGFS on price hike are believing that these increase in tariffs and SIM consolidation are positive for Bharti Airtel and Reliance Jio ,where Vodafone Idea is still in the network integration phase and may continue to lose more subscribers and market shares. Earlier on November 18 ,Vodafone Idea had stated "acute financial stress " in the sector that required it to hike tariff from December. The company had posted losses of Rs 50,921 crores in September 30 , the highest of all time by a corporate in India.
Brokerages believe that Bharti Airtel is having a comparatively safe position and capability of fund raising capacity may help them to have a simple payment system of including Spectrum and AGR liability. Motilal Oswal Financial Service (MOFSL) believes that if Bharti Airtel plans to repay the AGR liability with a mix of both equity and debt which will force the company to soften the 8 per cent equity policy at a price of 10 percent increase in the current market price.
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