Jio says tariff hikes can wait as it eyes 10-15 overseas partners

what happened

According to Moody's, Jio Platforms does not want to rely solely on raising subscriber charges. Management told analysts it will decide on tariff increases at an appropriate time, depending on market conditions and the wider economic environment. Operators have not taken an across-the-board headline tariff increase for more than two and a half years, and analysts had expected a rise of nearly 15% in the current fiscal year.

The company plans to sell its technology stack abroad, covering 5G, home broadband including fixed wireless access and UBR, and a feature phone operating system. The model is managed services with no large spending on overseas infrastructure. Management said it wants 10-15 partners of meaningful scale. Dolat Capital analysts assign no value to this overseas opportunity until the company discloses the economics.

After the listing on October 28, shares delivered gains of 21.4% over the issue price of Rs.1,119. Market capitalization reached Rs.13 trillion, making Jio the country's second most valued listed company after Reliance Industries. ARPU rose 3.5% year on year to Rs.218.8 a month in the September quarter.

why it matters

For markets, the delay in a widely expected tariff increase slows the revenue-per-user growth that investors had priced in for operators, including Bharti Airtel. Jio's overseas push does not yet generate revenue, and analysts remain divided on its value.

market impact

Indian telecoms: a delayed tariff hike slows ARPU growth, adding pressure on Bharti Airtel

• ▼Bharti Airtel shares pressure down — a delayed tariff hike slows expected ARPU growth

tags

instruments