Airtel, Vodafone shares rise after Jio’s move on call connect charges

| | New Delhi
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Airtel, Vodafone shares rise after Jio’s move on call connect charges

Friday, 11 October 2019 | PTI | New Delhi

Shares of telecom companies on Thursday rose up to 6 per cent in the wake of Reliance Jio deciding to levy call connect charges on customers, a move that is likely to be followed by rivals.

Bharti Airtel shares jumped 7.19 per cent to touch a 52-week high of Rs 385 apiece on the NSE. It closed 4.35 per cent up at Rs 375.05. Similar trends were witnessed on the BSE too. During the day, the scrip rallied 6.65 per cent to hit a 52-week high of Rs 384.85 apiece. After shedding some gains, the stock settled 5.05 per cent higher at Rs 377.40.

Vodafone Idea closed 5.82 per cent higher at Rs 6.18 on the BSE and 5.13 per cent up at Rs 6.15 on the NSE.

Unlisted Reliance Jio Infocomm is part of Reliance Industries, whose shares gained 2.76 per cent to settle at Rs 1,362.40 on the BSE. On the NSE, the scrip went up 2.67 per cent to close at Rs 1,360.15.

According to a Kotak Institutional Equities research report, Bharti Airtel and Vodafone Idea can take this as an opportunity to become more competitive. The report noted that Jio’s move would dilute the pricing architecture, one of the most critical changes Jio brought to the industry.

“If Jio gets Rs 15 ARPU (Average Revenue Per User) uplift, we believe Airtel and Vodafone Idea could see a Rs 8-odd and Rs 6-odd ARPU uplift, respectively, as well,” the report said.

In a research note, UBS said it remains to be seen whether Bharti and Vodafone Idea would follow Jio in introducing similar charges for off net calls, “although we see high chance that theyfollow Jio”.

 

 

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