Telecom tariff hike of 20% likely in 2024, post elections, says BofA Securities; Airtel shares zoom

livemint.com:

Vodafone Idea," said analysts at the brokerage house. The analysts believe that the extent of the tariff hike might take the market by surprise and consider Bharti Airtel to be in the most advantageous position among Indian telecom operators to leverage this hike, given its larger base of high-end users. Shares of Bharti Airtel hit a 52-week high of ₹1,069 on in early deals today following the report.

The American brokerage said that telecom carriers could see greater overall benefits if Reliance Industries considers listing Reliance Jio, and if Airtel opts to list or sell equity in its data centre and payments bank businesses, thereby unlocking value. For the quarter ended December 2023, Airtel, Vodafone Idea, and Reliance Jio are expected to report steady financials. Revenue growth could reach up to 3%, with earnings before interest, tax, depreciation, and amortization (Ebitda) margins remaining flat compared to the previous quarter.

A key profitability indicator, the average revenue per user (ARPU), is expected to rise for all telecom companies. Vodafone Idea may see the most significant increase – about 2.5% according to brokerage JM Financial – attributed to a more favourable mix of 4G subscribers, despite an overall drop in subscriber count. Jio’s ARPU is projected to climb 0.8% to ₹183, while Airtel’s may see a 1.5% sequential increase to ₹206.