Reliance Jio to reap tariff hike benefit only in Q1FY21, say analysts

Telecom analysts expect the tariff hike introduced in December will not reap concrete benefits for telecom companies, especially Reliance Jio, till the first quarter of 2020-21 financial year. Before this round of tariff hikes, the 28-day mobile plans were giving telecom operators maximum returns, as longer duration prepaid plans were at a discounted rate in the range of 10 per cent and 45 per cent.

“Jio’s new tariff plans would start from December 6. Hence, the full benefit of the new tariff plans may not be visible in the March quarter, but come through from the June quarter,” wrote Pinakin Parekh, research analyst at JP Morgan. Parekh noted that the Rs 50 vouchers, which Jio’s existing subscribers have, would be eligible in the new tariff plan recharge (and to that extent, the recharge would be Rs 50 lower based on the voucher used).