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Telecom tariffs to rise in FY20 2nd half: Report
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SME Times News Bureau | 17 Apr, 2019
Prices of telecom services are likely to rise in the second half of the
current financial year (2019-20), an Edelweiss report said on Tuesday.
The
probability of price hike can be attributed to the fact that the
penetration in mobile broadband services has increased significantly and
is nearing a saturation point.
"We estimate telecom operators to
raise prices in H2FY20 as mobile broadband subscriber penetration
reaches 65 per cent," said the report titled "Telecom-Daylight Again".
"Typically,
in a market characterised by low penetration of services, providers'
quest for market share to gain economies of scale drives down prices,
fuelling price wars. However, as investment requirements mount and
relative attractiveness of balance market wanes, weaker players
consolidate and participants start favouring pricing over incremental
market share."
On Reliance Jio, the Edelweiss report said that
after 10 quarters since its launch and achieving 30 per cent of the
revenue market share (RMS), "it is important to pause and take stock
where the company stands now versus its objectives".
"We believe
that after achieving one of its key goals -- 400 million subscribers in
H2FY20 -- Reliance JIO (RJIO) will hike prices to improve return
ratios," it said, adding that, JIO's management, during its launch, had
stated that one of its target is to achieve 400 million subscribers.
Regarding
Bharti Airtel, the report observed that, with a strong balance sheet
and adequate network investments, it is well placed to capitalise on
industry recovery.
On the merged entity of Vodafone Idea, it
said: "Although Vodafone Idea has higher operating and financial
leverage from India's telecom industry revival, we maintain our cautious
stance considering underwhelming capacity expansion plans and weak data
volume traction."
"We continue to believe that RJIO will become
India's largest telecom operator led by the network's high data capacity
driving mobile broadband subscriber market share."
Another report by UBS said that customer engagement and willingness to pay for the mobile apps is selectively increasing.
"Survey
results also shows that about 55-60 per cent of Jio's smartphone users
engage with Jio's app versus 35 per cent for Airtel and 25-30 per cent
for Vodafone and Idea," it said
The report, however said that
advertisement rather than subscription might be the main revenue source
from the content investments of the telecom operators.
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| Customs Exchange Rates |
| Currency |
Import |
Export |
US Dollar
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₹95.3
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₹93.6 |
UK Pound
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₹127.7
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₹123.7 |
Euro
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₹110.65
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₹106.9 |
| Japanese
Yen |
₹59.75 |
₹57.9 |
| As on 24 Jun, 2026 |
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