You are here

Shares of Indian telcos surge after mobile phone tariffs raised

Bharti Airtel, the country's third-largest wireless carrier, says it will increase prices of its most expensive plan by as much as 41 per cent.

New Delhi

SHARES of India's largest mobile phone service providers surged after they announced a raise in the cost of subscriptions to their plans, signaling a cut-throat price war in the nation may finally be easing.

Bharti Airtel Ltd, the third-largest wireless carrier, said it will increase prices of its most expensive plan by as much as 41 per cent, while Reliance Jio Infocomm Ltd, the biggest telecom company by subscribers in India, will boost tariffs by as much as 40 per cent from Dec 6.

Vodafone Idea Ltd also announced a new pricing plan for prepaid customers on Sunday, which would be effective Dec 3.

Market voices on:

The companies had all indicated in recent weeks that they would increase prices, after the government estimated the industry owes billions of dollars in licence fees and spectrum charges.

"This indicates a structural shift in the sector after a three-year period of deep discounting by the new entrant Reliance Jio," Neerav Dalal, an analyst at Maybank Kim Eng Securities, wrote in a note published Monday. Separately, Morgan Stanley upgraded Bharti Airtel to overweight from equalweight.

Vodafone Idea surged 15.1 per cent as at 1.42pm in Mumbai on Monday while Bharti Airtel gained 4.4 per cent. Reliance Industries Ltd, the flagship company of the group that includes the unlisted telecom unit, rose 2.2 per cent. A gauge of 13 companies related to the telecom industry jumped 4 per cent, set for the highest close since September 2018.

The Indian venture of Vodafone Group Plc may be headed for liquidation unless the government eases off demands for mobile spectrum fees, the phone company's chief executive officer warned last month. The industry has been caught up in a price war since Asia's richest man, Mukesh Ambani, launched low-price rival Reliance Jio in 2016. BLOOMBERG