New Tariffs Plans Will Help Telecom Operators Boost Revenue: Report

After a gap of three years, all telecom players have recently increased tariffs prices for their prepaid plans. This new hike is expected to help the sector as operators are sitting on huge debt. It has now been reported that this hike will boost the revenue of Q3 (October- December) of this financial year. However, analysts believe that the impact will be visible in 2020, especially in Q4 (January-March).

Besides, experts believe that there will be no major impact on voice and data consumptions, as consumers are using long-term prepaid plans. On the other hand, they suggested that there will be some dips due to internet shutdown, disruptions in services, and ongoing protest on the Citizenship Amendment Act (CAA).

"It would take around 60-90 days for the full user base of the Big 3 telcos to migrate to the new tariffs as many would still be on longer-validity packs (such as 84-day plans), and any dips in data consumption in the third quarter, if at all, may have been caused by frequent internet shutdowns following protests over the new citizenship law," Rajiv Sharma, research head at SBICap Securities, was quoted by Economic Times.

According to the report, telecom operators such as Airtel, Vodafone-Idea, and Reliance Jio increased tariffs prices by 40 percent. The report also reveals that there are high chances that Reliance will report a 60 percent increase in its net profit in Q3 (October-December) of this financial year.

"We expect revenue and Ebitda for wireless service providers to improve led by a price hike in December 2019 though the full impact is expected only in Q4FY20. Jio's revenue and subscriber market share gain set to continue, though at a moderate rate versus past few quarters," Axis Capital was quoted by the newspaper.

Also, the report reveals that Reliance Jio will issue its Q3 results in the third week of January. Whereas, it is expected that both Airtel and Vodafone-Idea will announce by the end of this month.