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Vodafone Idea Shares Jump Amidst Positive Outlook
11 Dec
Summary
- Vodafone Idea stock gained 3% to ₹11.07 on heavy volume.
- Analysts predict 12% ARPU CAGR driven by tariff hikes.
- Supreme Court allows government to reassess AGR dues.
Vodafone Idea's stock experienced a notable upswing, climbing 3% to ₹11.07 on heavy trading volume and approaching its 52-week high. This surge reflects growing investor confidence, bolstered by positive analyst outlooks for the telecom sector. Projections indicate a 12% ARPU CAGR through FY28, attributed to anticipated tariff hikes and strategic premiumization efforts.
The anticipated ARPU growth is expected to drive a significant EBITDA CAGR for telcos over the next few fiscal years. Analysts foresee a shift towards a 'pay as you use' model, which could further enhance revenue streams by aligning charges with actual data consumption, benefiting customers with lower usage while increasing revenue from high-usage premium consumers.
Further support for Vodafone Idea comes from recent legal developments. The Supreme Court has empowered the government to reconsider and reassess Adjusted Gross Revenue (AGR) dues, including interest and penalties. This ruling, coupled with ongoing discussions between Vodafone Idea and the Department of Telecommunications, presents a potential pathway to debt resolution and sustained recovery for the company.
