New Delhi, June 28: The latest round of 15-20 per cent mobile tariff hikes for prepaid and postpaid plans by telecom service providers (TSPs) can result in additional operating profits of around Rs 20,000 crore for the industry once these hikes are fully absorbed, industry experts said on Friday.

Bharti Airtel and Reliance Jio are likely to witness a significant average revenue per user (ARPU) benefit after the tariff hike. Vodafone Idea is yet to implement the mobile tariff hike. Airtel vs Jio New Plans: Check Prices of New 5G Unlimited Plans of Bharti Airtel and Reliance Jio After Tariff Hike, Know Changes in Old and Revised Rates.

"This will result in increased profit generation, thereby providing headroom for the industry to undertake deleveraging as well as fund capex for the technology upgrade as well as network expansion," said Ankit Jain, Vice President and Sector Head of Corporate Ratings, ICRA.

ICRA expects the industry revenues to grow by 12-14 per cent in FY25, which given the operating leverage, is likely to translate into healthy expansion in operating profits by 14-16 per cent. The telecom industry is likely to report revenues of Rs 3.2-3.3 lakh crore with operating profits of Rs 1.6-1.7 lakh crore in FY25.

"The improvement in operating profits coupled with the muted participation in the latest spectrum auctions and expected moderation in the capex intensity, the debt levels are expected to moderate to around Rs 6.2-6.3 lakh crore as on March 31, 2025, with the expectation of further decline going forward," said ICRA. Airtel New Plan: Bharti Airtel Announces Steep Hike in Mobile Tariffs Effective From July 3.

According to a note by Morgan Stanley, we expect other players, including Bharti Airtel, to follow and announce price increases soon for 4G subscribers. "We estimate that blended ARPU would benefit in the range of 16-18 per cent for Bharti Airtel and Reliance Jio," said the note.

(The above story first appeared on LatestLY on Jun 28, 2024 03:43 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website