Bharti Airtel Hikes Mobile Tariffs from July 3; Shares Up 1.24%

Bharti Airtel on Friday raised mobile tariffs by 11 per cent-21 per cent with effect from July 3. It comes a day after Reliance Jio announced a 12-27 per cent hike in mobile tariffs — the first in two and half years.

In the unlimited voice plans, Airtel has raised tariff from Rs 179 to Rs 199, from Rs 455 to Rs 599, from Rs 1,799 to Rs 1,999, according to a statement.

“Airtel will also revise its mobile tariffs… from July 3rd, 2024. We have ensured that there is a very modest price increase (less than 70p per day) on the entry level plans, in order to eliminate any burden on budget challenged consumers,” Bharti Airtel said in a regulatory filing.

Bharti Airtel has maintained that the mobile Average Revenue per User (ARPU) needs to be upwards of Rs 300, to enable a financially healthy business model for Telcos in India.

In the opening trade, Bharti Airtel’s shares were trading up by Rs 18.25 or 1.24 per cent at Rs 1,490.05 apiece.

JM Financial in its note said that with the tariff hikes by Bharti Airtel and assuming that the next tariff happens only by end-FY26 or early FY27, we see a limited 1-3 per cent upgrade to FY25 and FY26 ARPU/EBITDA estimate. We reiterate that industry ARPU is likely to grow at 10-12 per cent CAGR to Rs 300 in the next 3-4 years given the consolidated industry structure, and higher ARPU requirement for Jio also to justify significant 5G capex and given Jio’s potential IPO.

“We reiterate high conviction on our BUY on Bharti,” JM Financial said.

However, it maintained ‘SELL’ on VIL and HOLD on Indus as, despite the recent fund-raise, VIL’s long-term sustainability is still contingent on significant favourable government support.