Reliance Jio and Bharti Airtel Will Look to Gain Market Share Delaying Tariff

Reliance Jio

Reliance Jio and Bharti Airtel will look to gain more market share instead of hiking the tariffs after investing in the spectrum. Both the telcos want more subscribers, and that is why they have invested thousands of crores in purchasing spectrum. A statement from Mukesh Ambani Reliance Jio  saying that the spectrum bought will help Jio in catering to ‘300 million more subscribers’ is a hint about it being focused on adding new subscribers. Thus, tariff hikes are fairly unlikely to be introduced by the telco in the short-term. The same goes for Bharti Airtel.

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Vodafone Idea Needs to Hike Tariffs

In a note on Wednesday, BofA Securities said that Jio would be looking to add more subscribers to its portfolio, especially focusing on the 2G users of the country. The company further said that Bharti Airtel would also look to expand its subscriber base and delay the hike in tariffs.

However, tariff hikes are imminent. That may not happen in the short-term, but in the medium term, both Jio and Airtel are going to increase tariffs. As for Vodafone Idea (Vi), the telco is in desperate need of tariff hikes, which might happen in the short-term.

Investors of Vi will be focusing on the company’s balance sheets more aggressively since the spectrum auction is over now. The tariff hikes are going to benefit Jio and Airtel immensely. A higher average revenue per user (ARPU) will be easily achievable for the industry once the tariff hikes kick in.

The analysts at Credit Suisse said that Airtel would benefit from both the short-term or medium-term price hike. If the price hike comes at a later stage, it will keep on growing its user base at the cost of Vi, and if the price hike comes sooner, it will bump up its revenu

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