Telecom tariffs to rise in FY20 2nd half: Report

Telecom tariffs to rise in FY20 2nd half: Report
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Prices of telecom services are likely to rise in the second half of the current financial year (2019-20), an Edelweiss report said on Tuesday.

New Delhi: Prices of telecom services are likely to rise in the second half of the current financial year (2019-20), an Edelweiss report said on Tuesday.

The probability of price hike can be attributed to the fact that the penetration in mobile broadband services has increased significantly and is nearing a saturation point.

"We estimate telecom operators to raise prices in H2FY20 as mobile broadband subscriber penetration reaches 65 per cent," said the report titled "Telecom-Daylight Again".

"Typically, in a market characterised by low penetration of services, providers' quest for market share to gain economies of scale drives down prices, fuelling price wars.

However, as investment requirements mount and relative attractiveness of balance market wanes, weaker players consolidate and participants start favouring pricing over incremental market share."

On Reliance Jio, the Edelweiss report said that after 10 quarters since its launch and achieving 30 per cent of the revenue market share (RMS), "it is important to pause and take stock where the company stands now versus its objectives".

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