The telecom industry is set for a tariff hike of 15% to 17% after India's general elections, according to an analyst report cited by Money control. The main beneficiary of this expected increase is expected to be Bharti Airtel.

An analysis by Antique Stock Broking underscores the imminent nature of the tariff hike, emphasizing Bharti Airtel's advantageous position. The last significant tariff adjustment, around 20%, took place in December 2021.

Bharti Airtel Growth Projection

Detailing Bharti's average revenue per user (ARPU), the brokerage projects an increase from the current Rs. 208 for Rs. 286 at the end of FY27. This growth is expected to stem from several factors:

  • A fare increase of Rs. 55,
  • Upgrading 2G to 4G customers brings Rs. 10,
  • Customers who switch to higher data plans (4G and 5G) and postpaid services contribute Rs. 14.

Additionally, Bharti Airtel's subscriber base is projected to grow by 2% annually, outpacing the industry growth rate of 1% annually.

Antique Stock Broking expects Bharti Airtel to enter its strongest financial phase in over a decade, driven by tariff hikes, 2G upgrades, strong enterprise and fiber-to-the-home growth and reduced capex following the launch of 5G over the next three years.

Despite challenges like Bharti's unique 5G rollout strategy compared to competitors, the brokerage remains bullish on Airtel's subscriber base and growth trajectory. It suggests that current valuations do not yet reflect the emerging positive macro environment in the telecom sector.

Planned schedule for the rate increase

These changes reflect a dynamic and evolving telecom landscape in India. And the expected timetable for the rate increase is between the elections, i.e. July to October 2024.

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The elections, which took place in seven phases between April 19 and June 1, and the results announced on June 4, laid the foundations for this imminent change.


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