Both Bharti Airtel and Vodafone Idea (Vi) shares are in the green on Monday morning. This could be a result of the major announcement related to tariff hikes from Bharti Airtel. Airtel has hiked the prices of multiple prepaid plans. The reason why Vodafone Idea shares have also responded positively to this announcement is that Vi will also most certainly go ahead with tariff hikes now.
At the time of writing, Bharti Airtel shares are trading 4% higher at Rs 743 while Vodafone Idea (listed as Idea) shares are trading at Rs 10.55, which is 6.01% in the green. At the same time, Reliance Industries Limited (RIL), which owns Reliance Jio, is trading 3.30% in the red at Rs 2391.60.
Bharti Airtel and Vodafone Idea Both Looking to Increase ARPU Fast
The tariff hikes that Airtel has already announced and Vodafone Idea is expected to announce will help the telcos in increasing their average revenue per user (ARPU) figure.
Vodafone Idea shares had closed at Rs 9.95 on Friday, while they opened at Rs 10.55 on Monday morning. At the same time, Airtel shares had closed at Rs 714.35 on Friday while they opened at Rs 740 on Monday.
With tariff hikes, Airtel and Vodafone Idea will also come into a better position to pay off their existing debt. However, it will be key to notice what Jio will do in the next few weeks. The subscriber churn for Airtel is expected to increase steeply. However, the telco has expressed multiple times that it wants to focus on providing premium quality service to its users, and it doesn’t really care about subscriber market share the way Jio does.
The last round of tariff hikes took place almost around two years back. Vodafone Idea’s prepaid plans are also expected to be around the same price point as Airtel’s. This move from Airtel is going to help the telco in improving its cash flow situation very aggressively.
