May revise telcos' outlook from stable to -ve if tariffs do not rationalise: Fitch

Telecom stocks are under pressure after Jio announced its new offer over the weekend, slashing tariffs between 15-25 percent effective from January 9.

To discuss the impact of this CNBC-TV18 spoke to Nitin Soni of Fitch Ratings.

Soni said the reduction in tariff plans announced by Reliance Jio is not good news for the sector and was contrary to their expectations.

He said the average revenue per user (ARPUs) of the other incumbents like Idea and Bharti will definitely be impacted.

The house had recently changed the outlook for the telecom companies to stable from negative, said Soni.

There are hopes that at some point in time Jio will rationalise its tariffs but if this continues, then they would have to revise their outlook back to negative, he said.

Meanwhile, with Idea and Vodafone merging going forward, they will become the largest revenue market share telecom company in the country, said Soni, adding that some of the capex synergies that will come through with the merger might offset competition.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.