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DNA Money Edit: Will your mobile bill get inflated soon?

The financial stress in the sector has led to unprecedented consolidation, leaving only three strong private sector players in the fray

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Stressed telecom giants in India are keenly waiting for Reliance Jio to discontinue its promotions and discounts so that they could increase tariffs. RJio's decision to raise effective prices of most 4G tariff plans by 15-20% from October 19 was seen by many analysts as a trigger for the incumbent majors such as Bharti Airtel, Vodafone and Idea Cellular to consider price hikes after several quarters of chasing the debutant's disruptive rates. But they have now decided to retain their customers and attract new ones, and announced new pricing plans similar to that of RJio.

Global rating firm Fitch recently said the existing players are likely to see "mid-single-digit percentage revenue growth" in 2018, helped by increased data consumption and higher blended tariffs after the slump in 2017. The sector's declining revenue and margin trends would reverse in 2018 as the average blended tariff of the telecom industry will grow by 3-4% from the lows of around Rs 145 as newcomer RJio will gradually discontinue promotions and discounts.

The financial stress in the sector has led to unprecedented consolidation, leaving only three strong private sector players in the fray. Fitch estimates the combined revenue market share of the three biggies — Bharti Airtel, the Vodafone-Idea combined entity and RJio — to be around 90% in 2018.

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