Bharti Airtel, a leading telecommunications service provider in India, has seen new highs recently. The telco’s stock has touched its lifetime high price point post the announcement of prepaid tariff hikes. With the tariff hikes, the telco’s average revenue per user (ARPU) from wireless operations is going to increase substantially, which will positively affect future revenues.
At the time of writing, Bharti Airtel’s stock is trading at Rs 764.50, which is 0.74% in the green. After closing at Rs 758.90 on Tuesday, Airtel’s stock opened at Rs 764 on Wednesday morning, which was a new high itself. However, in the morning session, Airtel’s shares also touched Rs 781.80 before dropping to Rs 764.50 (at the time of this writing).
Airtel Shares Boosting Because Vodafone Idea Also Announced Tariff Hikes
Vodafone Idea (Vi) also announced tariff hikes on Tuesday. This means that Airtel isn’t alone in the race to increase ARPU. If Vi hadn’t increased tariffs, it would have meant a very high subscriber churn rate for Airtel. But since the new rates of the plans would be the same for both the operators, the subscribers will have no option but to either turn to Jio or stay with their respective operators.
In the last few months, Bharti Airtel’s stock has performed really strongly. Firstly, it was the relief measures announced by the government and then it was the government’s intention of withdrawing the one-time spectrum charge (OTSC) case from the Supreme Court. Now, it is the tariff hikes.
With the tariff hikes, the overall investor sentiment will go up for Bharti Airtel as Vodafone Idea has followed the telco as well. In the case of Vodafone Idea (listed as Idea in the stock exchanges), it is trading at Rs 11, which is 3.77% in the green. Even Vi has managed to get hold of the positive reaction from the market on the announcement of tariff hikes.