Reliance Jio, Airtel Might Post Profit In Q4 2020: Report

Reliance Jio and Airtel are likely to post profit in their revenues in the last quarter of the last financial year, thanks to the increased tariffs. However, Vodafone-Idea might face trouble and there are chances that its revenue will fall further.

For the unaware, the private telecom players have recently increased tariffs by 20 to 42 percent. This is the first hike ever since Reliance Jio came. Now, a new report suggested that people will also opt for higher packages. "Jio and Bharti will benefit from the price hike as well as subscriber addition, while subscriber loss is expected to continue for VIL," Axis Capital was quoted by Economic Times.

The firm also believes that Reliance Jio and Airtel are likely to add more subscribers, while Vodafone-Idea will lose customers. The brokerage firm also said that Reliance Jio will post a 31 percent profit in its revenue. Moreover, the firm estimates that its average revenue per user will increase by one percent. In fact, recently, its parent company Reliance Industries Limited has taken over its debt. This means that this move will reduce the Reliance Jio debt.

The Axis Capital also expects that Airtel and Vodafone-Idea are likely to reduce their losses as they have hiked prices last year in December. "Airtel and VIL, it estimates, will also report 5.2 percent and 3.7 percent ARPU gains on-quarter to Rs. 142 and Rs. 113," the firm added.

The telecom firms will raise the tariffs further in the coming months as they are looking to increase their APRU by Rs. 300 by the end of 2021. This also means that there will be two more tariffs hikes. However, the telecom regulator TRAI is planning to come up with floor pricing once the lockdown ends. The floor prices will fix the prices of data and calling rates.