Telecom Tariff Plan Hike: Why India’s Telecom Giants Jio, Airtel and Vodafone Idea Are Raising Tariffs; Know ARPU Targets and Other Details
India's leading telecom operators Reliance Jio, Bharti Airtel, and Vodafone Idea have announced tariff hikes. The tariff hikes are expected to improve financial health and monetise 5G services to support a sustainable business model amid ARPU targets and investment in 5G infrastructure.
New Delhi, June 29: India's leading telecom operators, Reliance Jio, Bharti Airtel and Vodafone Idea (Vi), have all announced tariff hikes within a short period of time. Jio has raised tariffs by 12-25%, with the steepest hike in some of its more premium plans. Airtel has increased prices by 11-21%. The third telecom operator, Vodafone Idea (Vi) has raised tariffs by 10-20%. It is anticipated that the trend to grow in the coming years, as the companies look for ways to monetise 5G services and improve the financial health of the industry.
As per a report of Indian Express, the primary reason for these tariff increases is that the telecom companies are expected to improve their financial health and monetise 5G services. Airtel has stated that the mobile Average Revenue per User (ARPU) needs to be at least INR 300 to support a financially viable business model for telecom companies in India. Airtel vs Jio New Plans: Check Prices of New 5G Unlimited Plans of Bharti Airtel and Reliance Jio After Tariff Hike, Know Changes in Old and Revised Rates.
In the quarter ending March 2023, Jio's ARPU was INR 181.70 while Airtel's ARPU was INR 209 and Vi’s ARPU was INR 146. The telecom industry has been calling for gradual price increases to improve their financial health, which has now become reality with Airtel and Jio announcing tariff hikes, effective from July 3, whereas Vi implemented tariff hikes effective from July 4.
In 2016, Jio's launch of affordable 4G services transformed India's telecom sector, making data rates the cheapest globally and thereby increasing online access. However, the industry is now calling for a gradual price increase to improve financial sustainability. The recent telecom spectrum auctions failed to generate large amounts of interest from telecom companies by bringing in over INR 11,340 crore, which is 12% of the government's set reserve price of INR 96,238 crore. Telecommunication Mobile Number Portability Regulations 2024: TRAI Implements New Rules To Combat Fraudulent SIM Swaps Effective From July 1.
The three major telecom operators heavily invested in 5G services, previously offered without separate pricing, which raises questions about when they would start making money. Jio has now begun the process by increasing the threshold for unlimited 5G data plans from 1.5GB/day to 2GB/day, effectively raising tariffs for 5G users by 46%, thereby initiating 5G monetisation.
(The above story first appeared on LatestLY on Jun 29, 2024 04:07 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).