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Telecom sector revenue may grow 4.5-5% on quarter in FY3Q

The telecom sector in the country has been receiving support from the Government in the form of relief packages, the first of which was rolled out in September.

In addition to these relief packages, factors like the residual effect of tariff hikes undertaken by telecom majors in July, increased sales of smartphones during the festive season, and the improving situation of the Covid-19 pandemic across the country, will lead to revenue growth of an estimated 4.5% to 5% in the telecom sector for the December-ending quarter or Q3 FY22, on a sequential basis.

Market experts and analysts are of the view that telecom majors, Reliance Jio, Bharti Airtel and Vodafone Idea will roll out another round of tariff hikes soon, to increase their ARPUs (average revenue per user) for driving revenue growth, amid increasing competition.

Acquiring new 4G customers is adding cost pressures on telecom players, which could lead to the telcos hiking tariffs.

Brokerage firm BNP Paribas believes that big players like Reliance Jio and Bharti Airtel should prioritise tariff hikes over market share gains to accelerate revenue growth.

Hiking tariffs, prominently in the ‘regular prepaid plans’ appears to be more important for Vi, compared to its competitors, as the loss-making telco can boost revenue growth per user, generate cash, and prevent revenue share erosion this way.

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