Bharti Airtel ARPU Likely to See an Increase of Rs 28 in 2020: Report

Telecom operators Bharti Airtel and Vodafone Idea will see an increase in Average Revenue per User (ARPU) in 2020 as an effect of the tariff hike, which happened a few days ago. According to a report by ICICI Securities, the resolution of AGR liability will be critical for the industry if it is to comprise three private operators- Reliance Jio, Vodafone Idea and Bharti Airtel in the market. If there’s no relief from the government on AGR, then it will be a little tough for Vodafone Idea to continue in the market as Bharti Airtel is looking to raise capital again. Right now, Bharti Airtel is ICICI Securities’ preferred pick in the sector depending on various aspects.

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Airtel and Vodafone Idea ARPU Increase Depends on Various Factors

Bharti Airtel and Vodafone Idea will be required to increase their ARPU in the coming quarters. The recently announced tariff hikes translating into higher revenues for each operator would be watched closely, says ICICI Securities. According to the firm, Bharti Airtel ARPU will likely see an increase of Rs 28, whereas Vodafone Idea ARPU will jump by Rs 23 in the Calendar Year 2020 (CY20). However, the ARPU growth in the coming year will be dependent on various drivers.

Firstly, telcos can cash on the recently announced tariff hike as customers are being provided with limited prepaid plans which offer limited scope for downtrading. While Reliance Jio’s prepaid plans are slightly cheaper, the Mukesh Ambani-owned telco is charging for the voice calls to other networks which will make the users think before opting the telco.