Reliance Jio Tariff Hike Rumours Send Airtel, Vodafone Soaring

Shares of telecom majors rallied up to 9 percent in Monday’s trade amid market rumours that Reliance Jio may increase tariffs this week.

Bharti Airtel closed 5.29 percent higher at Rs 367.25, while Vodafone Idea jumped 9.03 percent to Rs 6.16.

With a gain of nearly 4 percent, the BSE Telecom index emerged top gainer among the BSE sectoral indices. The benchmark BSE Sensex closed 155.24 points, or 0.40 percent, down at 38,667.

Among telecom stocks, OnMobile, Tejas Networks and Bharti Infratel gained between 0.45 percent and 2.77 percent.

Sanjiv Bhasin, EVP-Markets, IIFL said, “This is time for Jio to start raising rates because it has gained market shares and it’s about time it’s bottomline starts doing well. This festive season, it’s a win-win situation for the three telecom majors because the sector has gone through the worst amid price was and rising cost of money. With the cost of money easing, highers tariffs should bode well for all three players going forward.”

He said it would be a win-win situation for RIL given that it is in the process of launching a new channel, that would give them much more visibility to take on the likes of Netflix.

Reliance Jio is the telecom arm of energy behemoth Reliance Industries (RIL). RIL shares closed 1.82 percent higher at Rs 1,332.60, while the benchmark BSE Sensex closed 155.24 points, or 0.40 percent, down at 38,664.

An analyst said on the condition of anonymity that any rate hike by Jio will be followed by similar action by other major telecom players, including Airtel and Idea. It will also end the tariff war, he said.―India Finance News