Jio, Airtel likely to raise prices post 2024 Lok Sabha elections: Everything we know so far

Major telecom operators like Airtel and Jio are expected to raise tariff rates post 2024 Lok Sabha elections according to Antique Stock Broking. Analysts predict a 15 to 17 percent price hike in the telecom industry. Bharti Airtel could benefit the most with ARPU rising to 286 by FY 27.

Livemint
Updated12 Apr 2024
Mobile sim card packets for Vodafone Idea Ltd., Bharti Airtel Ltd. and Jio Platforms Ltd., on display outside a mobile phone service store in Mumbai, India, on Wednesday, Aug. 3, 2022. The South Asian nation sold spectrum, including 5G airwaves, worth 1.5 trillion rupees ($19 billion) across multiple bands, India�s telecom minister�Ashwini Vaishnaw�told reporters in New Delhi on Monday, confirming the government�s forecast of a�record�collection. Photographer: Dhiraj Singh/Bloomberg
Mobile sim card packets for Vodafone Idea Ltd., Bharti Airtel Ltd. and Jio Platforms Ltd., on display outside a mobile phone service store in Mumbai, India, on Wednesday, Aug. 3, 2022. The South Asian nation sold spectrum, including 5G airwaves, worth 1.5 trillion rupees ($19 billion) across multiple bands, India�s telecom minister�Ashwini Vaishnaw�told reporters in New Delhi on Monday, confirming the government�s forecast of a�record�collection. Photographer: Dhiraj Singh/Bloomberg(Bloomberg)

Major telecom operators like Airtel and Jio are likely to raise their tariff rates post the 2024 Lok Sabha elections, as per an analyst report from Antique Stock Broking. The largest democracy in the world is set to go to polls in seven phases between April 19 and June 4 with the results being declared on June 1.

The analyst report quoted by PTI while calling the tariff rise as ‘imminent’ states that the telecom industry could witness a 15 to 17 percent hike in prices post the general election. Reportedly, Bharti Airtel could be the primary beneficiary of this price hike with its ARPU (Average Revenue Per User) going up from 208 to 286 by the end of FY 27.

The brokerage expects Bharti Airtel's revenue to grow at twice the industry average in the next three years owing to hike in tariffs, 2G upgradation, growth of enterprise and Fibre to Home network and fall in capital expenditure after the 5G rollout. Bharti Airtel's capital expenditure is expected to be at 75,000 crore during the FY 24-26 period and the analysts predict there will be a ‘stark’ reduction in capex post the 5G rollout which could lead to a positive shift in the telecom sector.

"While challenges do exist as Bharti has chosen a different 5G rollout path versus key competitors, we believe it is unlikely to dent Bharti's subscriber base or growth significantly. We also believe valuations do not reflect the emerging highly positive macro telecom sector environment," Antique Stock Broking noted in the report.

The report also reveals how Jio and Airtel have been gaining increasing market share in the last 5.5 years at the expense of Vodafone Idea and BSNL. Jio has been the biggest beneficiary of this change in market dynamics, with its market share going from 21.6 percent to 39.7 percent during the said period.

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