Telecom stocks, including Vodafone Idea (Vi), Bharti Airtel, and Reliance Industries Limited (owns Reliance Jio), saw a strong opening on Tuesday morning. All the telecom operators were trading in the green shorts after the market opened. At the time of writing, Vodafone Idea (listed as Idea) is trading at Rs 11.55, which is 3.13% in the green. Vi’s stock had previously closed at Rs 11.20 and opened at the same price mark as well. The telco’s stock has already touched a high of Rs 11.60 as of now. Bharti Airtel is trading at Rs 747.50, which is 1.10% in the green. Airtel’s stock had previously closed at Rs 739.35, and it opened at Rs 740. Airtel has touched a high point of Rs 747.90 until now. Lastly, RIL is trading at Rs 2457, which is 0.63% in the green. RIL had previously closed at Rs 2441.50 and today opened at Rs 2468, touching a high of Rs 2475.90.
Why Are Telecom Stocks Rising?
Telecom stocks are rising because of the recently announced tariff hikes from all the operators. Reliance Jio, Vodafone Idea, and Bharti Airtel all have announced prepaid tariff hikes, and Vi and Airtel have already implemented it. This is going to give a boost to the average revenue per user (ARPU) figures of the telcos, which in turn is also going to be increasing their overall revenues. Further, the tariff hikes ensured that Vodafone Idea was in a position that would allow the telco to get the attention of outside investors. Both Jio and Airtel’s cash flow is expected to be positively impacted by over $1 billion. This is going to allow the telcos to invest more freely in the 5G spectrum auctions scheduled for 2022. Even Vodafone Idea will be in a better position to pay the upcoming debt. Vi would also be able to invest in its 4G networks aggressively with the money it is able to raise.
