Similar to the tariff growth booster dose for the downtrodden telecom industry

The Supreme Court ordered the telecom companies to pay average gross income (AGR) to the telecom industry for the telecom industry, which has been undergoing a severe crisis due to price war and debt of Rs seven lakh crore for the last three years. There is a burden of Rs 1.5 lakh crore. Recently, Vodafone, Idea and Bharti Airtel have made huge losses in the September quarter, making provision for payment of this huge amount. The tariff hike has been announced by telecom companies to ease the burden.

The lower price competition in the telecom sector will be met with additional announcements in tariffs. According to analysts, Reliance Jio could raise tariffs in the next while Bharti Airtel and Vodafone Idea could raise prices by up to 5% in the next three months. Thus, this announcement will prove to be a turning point for companies and price discovery will start in the telecom sector.

Ratings agency Credit Suisse said that after Jio had previously raised 5% prices, it would still have to raise the tariffs by 5%. Recently, it has taken steps to charge for outgoing calls on other networks, which will give Airtel and Vodafone Idea the opportunity to raise prices by up to 5% on average.

Jio, owned by Mukesh Ambani, is likely to be very cautious for the second round of tariffs as the discount or pricing difference between the old telecom companies and Jio has become smaller since Jio started charging for outgoing calls.

Three years ago, Jio had triggered a stir in the telecom sector by offering extremely low tariffs. This led to the launch of PriceWorks and caused a huge blow to other telecom companies. However, Jio had explicitly stated that it would increase tariffs in such a way that it does not affect the consumption of data or the proliferation of digital services. Vodafone Idea and Airtel announced a hike in tariffs from next month, followed by Jio announcing tariff hikes.

However, this issue will now have to look at Tri's pricing consultation paper, which Geo has discussed. After the increase in tariffs by all three telecom companies, the impact on the telecom sector will only come when the increase is more than 5%.

The long-awaited move by Jio will be considered the beginning of 'price discovery'. However, how much it benefits the telecom sector will depend on these tariff growth and government relief measures.

The average revenue per customer of Airtel and Voda Idea increased by 5% to Rs. 3 and Rs. 2 will happen. The fact that the government is focusing on the financial health of the telecom sector will prove important. Also, the adversity raised by the issue will also end, Telecom experts believe.