Telecom stocks in demand, surge up to 8%

Telecom stocks today surged up to

8 per cent after the recent increase in Reliance Jio tariffs,

which is largely seen as positive for the sector.

Shares of Bharti Airtel jumped 4.99 per cent to close at

Rs 497.50 on BSE.

Bharti Airtel was the biggest gainer among the 30-share

index components.

The scrip of Idea Cellular soared 7.74 per cent to end at

Rs 98.15 and Reliance Communications zoomed 7.60 per cent to

Rs 17.70.

Reliance Jio made its service dearer by about 15 per cent

for its popular 84-day plan at Rs 459 from October 19, under

which subscribers get 1GB 4G data at high speed per day.

The company restructured its various schemes by reducing

their validity period.

The recent increase in Reliance Jio tariffs will increase

its average revenue per user by up to 20 per cent and is a

positive for the telecom sector, which is seeing a rapid

consolidation, says a Philip Capital report.

Established telecom sector players have seen huge

reduction in their margins. Idea Cellular and Reliance

Communications first time reported consolidated loss mainly on

account of free services launched by Jio.

"The Indian telecom industry is seeing huge amount of

consolidation and with decreasing choices for the subscribers

the operators will compete on quality of service over the

medium to long-term. This could mean sustained increase in

ARPU over the medium to long-term. We are highly optimistic on

the prospects of the Indian telecom industry," the report

said.

ARPU is average revenue per user.

 

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)