As the world’s largest democracy gears up for its general elections, the Indian telecom industry is reportedly preparing for a significant tariff hike. According to an analyst report from Antique Stock Broking, this hike, estimated between 15-17 per cent, is deemed “imminent” post the election period, with Bharti Airtel said to be the primary beneficiary.
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A report from PTI highlights that the last tariff hike, approximately 20 per cent, occurred in December 2021. It predicts Bharti Airtel‘s Average Revenue Per User (ARPU) to surge from the current Rs 208 to Rs 286 by the end of FY27. This boost will be propelled by various factors including tariff hikes, the transition of 2G customers to 4G, and the migration of customers to higher data plans, both 4G and 5G. As of now, there is no official confirmation of this tariff hike by the companies. India Today Tech has reached out to Airtel and Jio regarding the same, and we will update the copy once we receive any details.
Antique Stock Broking anticipates Bharti’s subscriber base to grow at twice the industry average, reflecting a robust performance phase for the company. Factors contributing to this optimistic outlook include tariff hikes, 2G to 4G upgrades, enterprise and Fibre-to-the-Home growth, and reduced capital expenditure post the 5G rollout.
Despite the challenges posed by Bharti’s unique 5G rollout strategy compared to its competitors, analysts remain confident in its ability to sustain growth. Moreover, they believe that current valuations do not fully capture the positive momentum within the telecom sector. Bharti Airtel’s projected capital expenditure (capex) over FY24-26 stands at approximately Rs 75,000 crore, inclusive of the 5G rollout. Post-rollout, a significant reduction in capex intensity is expected. This reduction, coupled with a decline in total India capex, signifies a favourable shift in the telecom landscape.
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The report also highlights the ongoing market share dynamics within the telecom sector. Over the past 5.5 years, Bharti Airtel and Reliance Jio have steadily gained market share at the expense of Vodafone Idea and BSNL. While Vodafone Idea’s market share has nearly halved since September 2018, Jio has emerged as the largest gainer, solidifying its dominance in the market.
