The 20-25% prepaid rate hike announced by Vodafone Idea (Vi) will help the telecom service provider as it has remained in a tight spot despite government efforts to support the industry, said Peter Milliken, research analyst, Deutsche Bank.
“It was a deep hole that Vodafone Idea was in. Government efforts provided a stepladder to help them get out of that hole. It was not high enough however, they need more,” said Milliken in an interview with CNBC-TV18.
“The 20% to 25% increase in prepaid rates helps Vi,” he said.
According to Milliken, financing the deployment of 5G will continue to be a challenge for Vodafone Idea.
“This puts Vi in a position where he is positive and still has to pay his interest and that would be the challenge they have of how to do that while deploying a 5G network,” said Milliken.
Milliken expects Jio to eventually increase tariffs. “It is in everyone’s interest to move slowly towards the most standardized set of plans,” he said.
“We have to wait another 12 months or so, and then maybe push the prices up another 15%, and then we’re in a much more economical position for the industry,” he said.
For the full interview, watch the accompanying video.