The 20-25 percent hike in prepaid tariffs announced by Vodafone Idea (Vi) will help the telecom service provider considering it remained in a tight situation despite the government's efforts to support the sector, said Peter Milliken, Research Analyst, Deutsche Bank.

"It was a deep hole that Vodafone Idea was in. The government’s efforts provided a step ladder to help it get out of that hole. It wasn’t high enough though, they need more," said Milliken in an interview with CNBC-TV18.

"The 20 to 25 percent hike in prepaid tariffs helps Vi," he said.

After Bharti Airtel, Vodafone Idea on Tuesday announced a 20-25 percent hike in its prepaid tariffs.

According to Milliken, funding for 5G rollout will continue to be a challenge for Vodafone Idea.

“This gets Vi into a position where it is positive and still needs to pay off its interest and that would be the challenge they have of how do they do that while rolling out a 5G network,” said Milliken.

Milliken expects Jio to eventually hike tariffs. "It is of everyone’s interest to slowly move towards most standardized set of plans," he stated.

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“We do need to wait for another 12 months or so and then perhaps push prices up another 15 percent and then we are at a much more economic stance for the industry,” he said.

For the full interview, watch the accompanying video.

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