Vodafone Idea and Airtel tariff hike: This is what analysts have to say

Asia's Tech News Daily

Vodafone Idea and Airtel tariff hike: This is what analysts have to say
NEW DELHI: Vodafone Idea’s latest prepaid tariff hikes can boost its revenues by ~10%, while entry tariff hike can further boost revenue by ~7% assuming there is no churn or down-trading from data subscribers, CLSA said. The hikes will likely also help the telco in closing planned $3.4 billion fund raising, which the company aims to conclude by end-FY22
Vodafone Idea has 137 million data subs with 116 million being on 4G networks out of its total 254 million subscribers. Its 2QFY22 mobile Arpu increased 5% QoQ and subscriber loss decelerated, to 1.4 million decline.
Following Bharti Airtel, Vodafone Idea raised tariffs by 20%. Its price plans are now similar to Airtel.
VIL’s ARPU, which stands at a mere Rs109– 40% below Bharti Airtel– given the higher proportion of customers on lower base plans, could see a big push, provided it doesn’t see a huge market share loss.
Vodafone Idea’s base plan has now increased to Rs 99, compelling consumers to recharge to higher plans, offering a huge push to ARPU. “However, this may result in further consolidation of dual SIM cards, increasing churn,” Motilal Oswal said.
“The hike should increase ARPU to INR128 v/s INR109 at present. The high operating leverage, given the low existing EBITDA margin of a mere 17% v/s Bharti’s 49%, should drive higher growth compared to Bharti’s 24% increase in EBITDA,” Motilal Oswal said.
This hike, catering to ~70% of its revenue pool, can potentially offer an incremental EBITDA of Rs38 billion, i.e. a 68% jump as compared to 13% for Bharti Airtel, Motilal Oswal said in a note.
“While there is a limited risk of downtrading, given the way the price plans are designed, there is a risk of steep market share loss similar to the last price hike (Dec’19), which saw a mere 20% flow through of the estimated EBITDA upside at INR15 billion,” Motilal Oswal added.
The telco’s financial crisis has already been averted following the four-year moratorium on government payments of spectrum and AGR (adjusted gross revenues). It has an option to convert interest on government dues to equity by 12 January, 2022, while conversion of principal will be at the end of four-year moratorium period and at the discretion of the government.
The tariff hike caters to 70% of its revenue pool (excluding postpaid and the B2B business), thus offering incremental revenue/EBITDA of INR55b/INR38b (2QFY22 annualized), i.e. a 14%/68% increase.
Additionally, VIL’s cash flow crunch will get addressed provided the current subscriber churn is arrested, with Rs 80-100 billion of estimated annual capex and interest expense.
ICICI Securities said that Bharti Airtel and Vodafone have taken their highest hikes in the base 2G pack, which would make telecom service less affordable. On the other hand, the heavily discounted category of unlimited 4G data plans has seen relatively lower price increase.
“…we expect subscribers to decline in the next few quarters due to reduced affordability in base 2G plans, and SIM consolidation due to general increase in tariffs, ICICI Securities said, adding that it further expects subscriber downgrade to lower GB/day plans.
“Vodafone Idea has in fact cut tariffs on its 365-day plan with a lower allowance of 1.5GB/day (earlier 2GB/day); and new plans make JioPhone Next relatively attractive,” it added.
The narrowing of postpaid tariffs compared with prepaid and increasing content offerings with family plans is likely to help Bharti Airtel push more postpaid subs. Prepaid constitutes ~80% of mobility revenues for both telcos and new tariffs will result in 21% prepaid ARPU rise. “14% of 2G revenue to increase by 25%; and remaining to rise to 20%. We see 16.7% increase in blended ARPU / revenue for Bharti and VIL,” ICICI Securities added.

Internet Explorer Channel Network
Asia's Tech News Daily
News Related

OTHER NEWS

Citi announces grants for Indian startups: Key details

American lender Citi on Monday said it will be giving a grant to Indian startups for scaling up activities having a positive societal impact in the agriculture, healthcare and financial ... Read more »

Chewing gum to cut Covid-19 transmission under development: Report

Scientists are developing a chewing gum laced with a plant-grown protein that serves as a “trap” for the SARS-CoV-2 virus, which causes COVID-19, reducing viral load in saliva and potentially ... Read more »

Walmart's new Nintendo Switch bundle is now available – but it won't last long

Black Friday and Cyber Monday may have come and gone, but a new Nintendo Switch bundle is now available at Walmart that includes a 12-month subscription to Nintendo Switch Online ... Read more »

Floods are going to get worse: we need to start preparing for them now

Floods across the world this year cost hundreds of lives and millions of pounds in damages. Brian Norcross/FreeImagesLive, CC BY-SA For many, 2021 was the year of the flood. From ... Read more »

'Absolutely love it!': These photo printers make the perfect holiday gift—and they're on sale at Amazon today

We may receive commission from purchases made via links on this page. Pricing and availability are subject to change. Save up to 23 percent off photo printers. (Photo: Amazon) Finding ... Read more »

Intel Core i3-12100 could blow away AMD to be the new champion of budget CPUs

Intel’s Core i3-12100 could be a storming budget CPU, at least if the latest leak around incoming Alder Lake silicon is on the money. This comes from Hong Kong-based tech ... Read more »

Best backup software of 2022

The best backup software helps you reliably backup your saved files and folders, as well as provide advanced options to better manage your saved data. Whether you’re a business or ... Read more »

This top-rated robot vacuum is on sale for just $136 on Amazon Canada

Looking for more gift guides and holiday tips? Sign up for Yahoo Lifestyle Canada’s newsletter! Amazon’s top-rated robot vacuum is currently on sale for more than 20 per cent off. ... Read more »

BitMart crypto exchange hit with $150m hack

Crypto exchange BitMart has suffered a security breach which saw the attackers make off with roughly $150 million in different cryptocurrencies, the company’s leadership has confirmed. Taking to Twitter, BitMart ... Read more »

Covid: Sajid Javid to deliver Commons update on Omicron this afternoon

Sajid Javid will give an update in the House of Commons (PA Media) Health secretary Sajid Javid will update MPs on the latest Covid developments in a statement to the ... Read more »

WhatsApp expands disappearing messages tool

WhatsApp users are being given the option to turn on disappearing messages by default when they start a new chat, the messaging platform has said. The update will also see ... Read more »

EV maker Lucid crashes after disclosing SEC subpoena

SILVER SPRING, Md. — Shares in the electric vehicle startup Lucid Group tumbled Monday after saying that said it had been subpoenaed by government regulators, apparently over the process by ... Read more »

Report says Russian hackers haven't eased spying efforts

FILE – The Kremlin in Moscow, Sept. 29, 2017. The elite Russian state hackers behind last year’s massive SolarWinds cyberespionage campaign hardly eased up this year, managing plenty of infiltrations ... Read more »

Acer launches Predator Helios 500 with 120Hz 4K mini LED display, Intel 11th-gen i9 processor and GeForce RTX 3080: Price, features and more

Acer has launched its Predator Helios 500 laptop in India. This laptop sports an 11-gen Intel Core i9 processor and has a mini-LED display that supports 120Hz refresh rate. It ... Read more »

Carbon capture and storage: where should the world store CO₂? It's a moral dilemma

The recent Glasgow climate pact committed 197 countries to “phas[ing] down unabated coal”. Unabated coal refers to when power stations or factories burn coal without capturing and storing the carbon ... Read more »

EV maker Lucid subpoenaed by SEC over SPAC merger

SILVER SPRING, Md. (AP) — Shares in the electric vehicle startup Lucid Group tumbled Monday after saying that said it had been subpoenaed by government regulators, apparently over the process ... Read more »

The best Amazon Kindle deal of all time is happening right now: Save $35 and get a 3-month Kindle Unlimited subscription

We may receive commission from purchases made via links on this page. Pricing and availability are subject to change. It was a dark and stormy night. I picked up my ... Read more »

Acer Predator Helios 500 (PH517-52) launched in India with Intel Core i9 CPU, RTX 3080 GPU, 120Hz 4K Mini LED Display

The Acer Predator Helios 500 (PH517-52) has officially been unveiled in India. The Predator Helios 500 is a top-end gaming laptop that arrives with an 11th Gen Intel processor, and ... Read more »

Mother luckily escapes injury as baby's cry brings her out of kitchen seconds before explosion

A mother luckily escaped death as her baby's cry brought her out of the kitchen seconds before an explosion in southern China. Video shot in the city of Zhanjiang in ... Read more »

Why Microsoft avoided antitrust scrutiny that plagued other tech giants in 2021

The Big Tech reckoning gained momentum in 2021, as U.S. regulators accused behemoths like Google and Facebook of abusing their market power to gain an illegal edge over competitors. But ... Read more »

10-year-old fidget toy maker set to retire by age 15

10-year-old fidget toy maker set to retire by age 15 A 10-year-old entrepreneur from Australia – who has a toy and hair accessory empire – is set to retire by ... Read more »

Microsoft is Yahoo Finance's Company of the Year 2021

Microsoft (MSFT) has had a stunning year. After nearly 50 years in business, the tech giant crashed through the $2 trillion market capitalization mark in June, joining an exclusive club ... Read more »

Coronation Street's Roy Cropper actor to make a Christmas comeback

David Neilson playing Roy Cropper in Coronation Street credit:Bang Showbiz David Neilson is set to return as Roy Cropper in a dramatic Christmas 'Coronation Street' comeback just weeks after exiting ... Read more »

Amanda Owen makes very candid comment about family 'difficulties' in new interview

Our Yorkshire Farm star Amanda Owen has opened up about facing “difficult moments” in a new interview with Lorraine Kelly. MORE: Amanda Owen's fans jump to her defence after she ... Read more »

Reintroducing masks in England may be met with resistance – here's how the government can overcome it

Richard M Lee/Shutterstock There are fears that the new omicron variant of the coronavirus could be the most transmissible form of the virus yet, so infection control measures are being ... Read more »

This new Toshiba 4K TV is the first Amazon Fire TV to feature local dimming

Toshiba has announced its latest 4K flagship, the M550KU Fire TV, which the company says will the first Amazon Fire TV to feature local dimming, with up to 48 dimmable ... Read more »

US military officially confirms action against ransomware groups

Tackling ransomware operators in the US is no longer just a job for the police, but the military and national intelligence officers and spies, government officials have revealed. Speaking to ... Read more »

How to 'force restart' your phone: Talking Tech podcast

Hit play on the player above to hear the podcast and follow along with the transcript below.This transcript was automatically generated, and then edited for clarity in its current form. ... Read more »

[Exclusive] Future K2 tanks could run on homegrown transmission

K2 Black Panther main battle tank (Hyundai Rotem) The next batch of South Korea’s K2 Black Panther main battle tanks are expected to run on an locally-made transmission system instead ... Read more »

Realme 9i key specifications detailed; Could feature 90Hz Display, Snapdragon 680 SoC

The Realme 9 series is slated to drop in January 2022. We previously reported that the company will introduce at least four smartphones in the Realme 9 line-up. Now, one ... Read more »

Microsoft 365 is seriously late to the party with this important hybrid working feature

Avoiding embarrassing meeting snafus could soon be a lot easier thanks to a long-awaited new update from Microsoft 365. The software suite has revealed that users will finally be able ... Read more »

Cryptocurrency: Hackers steal $150m from platform BitMart after 'large-scale security breach', company says

The company has suspended withdrawals following the breach. Read more »

These Are The Last Christmas Posting Dates For 2021

(Photo: Sergio Amiti via Getty Images) The festive lights have been turned on and the mince pies are out in full force, which means one thing: it’s time to send ... Read more »

Euro 2020 and sea shanties among TikTok's highlights of the year

Cats, sea shanties and Euro 2020 were among the biggest trends on TikTok in the UK during 2021, according to figures from the video-sharing platform. The social media giant’s annual ... Read more »

Looking for a holiday gift? The new Nintendo Switch is 'worth the upgrade' — plus more hot tech finds from Best Buy

Looking for more of the best deals, sales and product recommendations? Sign up for Yahoo Lifestyle Canada’s newsletter! Shoppers say the Nintendo Switch OLED Model is “worth the upgrade.” Yahoo ... Read more »

D-Link R15 Eagle Pro AI AX1500 router launched in India

D-Link has launched its all-new R15 Eagle Pro AI AX1500 smart router in India. The company has priced the router at Rs 3,299 in the country and it is available ... Read more »

US-China tech war: semiconductor links across Taiwan Strait faces political headwind

The long-standing bond between mainland China, the world’s second-largest economy, and semiconductor powerhouse Taiwan faces its stiffest challenge in decades amid increased cross-strait tensions and growing friction between Beijing and ... Read more »

Fauci says early data on the Omicron variant is 'encouraging' but we don't yet truly know how deadly it is

Dr. Anthony Fauci.AP Photo/J. Scott Applewhite, Pool Dr. Anthony Fauci said Sunday that South Africa's initial data on Omicron is “a bit encouraging.” However, the top US medical doctor said ... Read more »

Apple VR headset is primed for gaming – but can it compete with Quest 2?

The Apple VR headset has been rumored for years now, and with the device launch possibly coming in 2022, speculation about the specific focus and capabilities of the device are ... Read more »

Final Fantasy 14 Endwalker players will get free game time following rocky launch

Final Fantasy 14 Endwalker launched just a few days ago on December 3, 2021, and the new expansion represents the culmination of a decade of experience and storytelling for Square ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic