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market | IST

Bharti Airtel’s 20% prepaid tariff hike positive for industry, expect peers to follow: Axis Securities

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“This is a very significant tariff hike by Bharti and also a very positive one for the telecom industry,” said Naveen Kulkarni, CIO of Axis Securities, in an interview with CNBC-TV18. Kulkarni expects peers to follow suit

Bharti Airtel, on Monday, announced its decision to hike prepaid tariffs by 20-25 percent with effect from November 26. With this hike, the existing tariff of Rs 75 with validity period of 28 days will be hiked to Rs 99, while the existing tariff of Rs 149 with validity period of 28 days will be increased to Rs 179.
“This is a very significant tariff hike by Bharti and also extremely positive for the telecom industry,” said Naveen Kulkarni, CIO of Axis Securities, in an interview with CNBC-TV18.
“The tariff hike was clearly expected in the short-term,” he noted.
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“Almost 20 percent hike on most of the prepaid tariff plans is very significant. We were not expecting this kind of hike and that too the initiative being taken by Bharti itself, we were expecting around 12-15 percent kind of a hike led by Jio and then others following suit,” he said.
The Rs 200 average revenue per user (ARPU) that Bharti management has been talking about is very much reachable probably in the next one year kind of a timeframe.
Considering the three-player telecom market, the sustainability of tariff hikes seems to be there, Kulkarni mentioned.
“I do believe that these tariff hikes are sustainable. Jio will follow suit because Jio has other plans, that is the customer acquisition strategy for them is more significant than tariff as a play,” he said.
According to Kulkarni, Vodafone Idea is a stock to watch out for. “The biggest beneficiary from the stock performance point of view could be Vodafone Idea; Bharti Airtel should do well in today’s session,” he said.
For the full interview, watch the accompanying video.
Disclosure: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.
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