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    Jio may hike tariff eventually; Rs 9500 cr EBITDA benefit seen: Expert

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    Jio may hike tariff eventually; Rs 9500 cr EBITDA benefit seen: Expert

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    Kapoor's comments came after Bharti Airtel and Vodafone Idea announced hikes in their prepaid tariffs. The companies increased prepaid tariffs by 20-25 percent. 

    Telecom expert Sanjay Kapoor on Wednesday said that Reliance Jio is likely to increase its tariffs eventually which would mean a benefit of about Rs 9,500 crore for the company in terms of EBITDA.
    Kapoor's comments came after Bharti Airtel and Vodafone Idea announced hikes in their prepaid tariffs. The companies increased prepaid tariffs by 20-25 percent. 
    "If Jio was to follow, which is a matter of time, according to me... They will probably delay a little more, but eventually they will see merit in this because they are the biggest beneficiaries," said Kapoor in an interview with CNBC-TV18.
    "I think it's accretive for the industry, it gives the industry money to deploy back into customer experience and compete in the market," he said.
    Kapoor said the recent policy changes by the government have been positive for the telecom sector as far as cash flow of companies is concerned. However, he said the industry needed a lot more than the policy changes for "self-help" and that the tariff hikes have come at the right time.
    "Either Jio or Airtel had to lead this bandwagon (price hike). Given Vodafone Idea’s position, they could have only followed a leader in this space," said Kapoor.
    On 5G and newer technology, he said, “But if the question is that, will this provide enough resources to transform into newer technologies like 5G? The answer is no, this is not going to be sufficient. This is just going to deal with the problem that they have right now of becoming competitive on customer experience with the rest of the world. Eventually for 5G, a lot more will have to be done. This price hike still doesn't get you too far. The ARPUs are still below what they were two years back. So I think India will really have to have a roadmap to go to $7-8 or $10 eventually at some point in time, if we want to stay contemporary with the consumer experience."
    Note To Readers

    Disclosure: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.

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