Jio, Airtel, Vi may increase tariffs by 10% this year
What's the story
Telecom giants Reliance Jio, Bharti Airtel, and Vodafone Idea are said to be contemplating a tariff hike of up to 10% in 2025.
The Financial Express reported this, citing insights from industry analysts.
The last major tariff hike by these companies was a 25% increase that was introduced in July 2024 after a two-year gap.
Pricing strategy
5G-specific pricing could accompany tariff hike
Along with the possible tariff hike, the telcos are also considering 5G-specific pricing. This is part of their overall focus on monetization in the changing telecom landscape.
Analysts Akshat Agarwal and Ayush Bansal of Jefferies told The Financial Express, "Jio's potential listing in 2025 will likely make it more amenable to higher tariffs to boost its growth."
Revenue impact
Tariff hike aims to enhance telecom sector's growth
The proposed tariff hikes could increase the average revenue per user (ARPU) by at least 25%. This significant rise in ARPU is likely to aid the expansion and growth of the telecom sector in 2025.
However, Jio's revenue gain could be slower as it lost 11 million subscribers after the previous tariff hike, which was attributed to SIM card consolidation.
Subscriber shift
Market dynamics post-tariff hike
Post the tariff hike, market dynamics may change for Airtel and Vodafone Idea.
Airtel's gains in the rural market could slow down as most of the network rollouts have already been completed.
On the other hand, Vodafone Idea could witness a rise in its market share as it plans to start network rollouts only after its recent capital raise.