Reliance Jio, Airtel, and Vi to increase tariffs by 10%
You may soon have higher mobile bills as leading telcos in India are expected to hike the prices of their mobile plans. According to analysts at Jefferies (via Business Insider), telecom operators including Reliance Jio and Airtel are expected to announce a hike of about 10% in tariffs in the fourth quarter of FY23, FY24, and FY25.
Why does this story matter?
Reliance Jio, Vi (Vodafone Idea), and Bharti Airtel are expected to increase the prices of their prepaid and postpaid plans. Perhaps, some of us saw this coming. The race to attract users in the 4G era triggered a price war where rivals were undercutting each others' tariffs. But with falling revenue and 5G rollout, a price hike was only a matter of time.
Telcos want to improve their ARPU
As per reports, the increase in tariff rates might be due to the mounting pressure on the companies' revenue and margins. The ARPU (Average Revenue Per User), which is a key indicator of a telco's performance, climbed moderately for Airtel, Jio, and Vodafone Idea in the September quarter this year. And now, raising the prices of plans will further improve the ARPU figures.
Airtel has started removing cheaper mobile plans
Airtel has already begun hiking the rates of its existing plans. Alongside, the company is also withdrawing cheaper plans. It recently discontinued the Rs. 99 pack due to low profits. The affordable plan, which included 1GB of data and 100 messages, was released as part of the company's rural expansion plan. Now the minimum recharge pack for Airtel users starts at Rs. 155.
Vi continues to witness a dip in subscribers
Over the last few months, the subscriber base for both Airtel and Jio has grown and the upcoming hike in tariffs might add to the competition between the telcos. Vi, on the other hand, continues to witness a loss of subscribers. The company is also lagging behind Airtel and Jio in the 5G rollout race. It is yet to launch its service in India.
Airtel and Jio are steadily expanding their 5G network
Jio and Airtel have started releasing their fifth-generation services across select parts of the country. They are yet to announce their 5G data plan structures. Reliance Jio plans to complete its rollout across the country by the end of 2023 while Airtel has set a target of March 2024. Recently, Airtel 5G Plus was launched in Imphal, Ahmedabad, and Gandhinagar.
