Bharti Airtel and Vodafone Idea hiked prices of popular prepaid plans by 25-30 percent, while Reliance Jio to introduce new all-in-one plans with unlimited voice and data and could raise tariffs upto 40 percent higher. However, the postpaid plans have not been touched yet.

Naveen Kulkarni of Reliance Securities is of the view that the price value equation currently is very much favourable for the consumers. So this tariff hike should get passed on easily.

With regards to average rate per user (ARPU) increase, he said, “The ARPU increase should be in the range of around 20-25 percent. There could be some bit of elasticity because telecom industry historically has seen elasticity, which has been negative."

“We could be looking at a Rs 25 kind of an ARPU improvement for the likes of Bharti Airtel and so we could be looking at Rs 150 plus ARPU for Airtel and with that kind of improvement in ARPUs, there could be around 35 percent kind of an accretion in EBITDA also,” he added.

With regards to Jio, he said “The strategy of Jio is not very clear at this point in time because they are saying they are going to raise tariffs but there could be multiple benefits that they are going to provide to the end consumers. So, we will have to wait and watch for that." However, in the interim, it would be safe to assume that there would be explicit tariff hike. Going ahead what happens is something which remains to be seen because telecom as an industry has been very poor in maintaining pricing discipline, he further added.

“Jio is altogether different player in terms of its expertise and capability. It has many other plays which the incumbents don’t have – one is the network data capacity, which is far higher than others. Second, they have a handset model into their strategy. So there could be a lot of benefits, which the consumers get in that form and fashion, which is again very difficult to calibrate at this point in time. For Rs 600-700 plan, if you get a nicer handset then it makes a very different ballgame,” he further mentioned.

On the post-paid segment, he does not expect any activity because the tariffs there are already high. Moreover, the benefits, which have been offered to post-paid consumers vis-à-vis the pre-paid consumers are very different, he said, adding that nobody would like to would want to touch their premium subscriber base and unnecessarily disturb that segment, which is already making a decent ARPU for the company.

The companies would first like their pre-paid segment to stabilise. In a three months timeframe they would know what happens in terms of upgrading or downgrading of customers. So, nothing will happen for the next three months at least in the post-paid segment, said Kulkarni.

The tariff hike also gives Vodafone-Idea a breather. "To raise the money to pay the whole adjusted gross revenue (AGR) amount is going to be a challenge. If government provides them with some incentive or some financing plan, then there is a case for that. We will have to wait and watch out for what happens in that kind of a scenario,” he said.

Disclosures:

RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.