Users may have to shell out more for mobile recharge plans in the coming years. Telecom companies in India will hike tariffs by up to 10 percent by March next year, investment banking firm Jefferies has reportedly said. Bharti Airtel and Reliance Jio are said to increase their tariffs in the last quarter of fiscal 2023, 2024, and 2025. Increasing pressure on the revenue and margins of the companies are likely to be the key reasons for tariff rise. The three major Indian telecos reported moderate gains in average revenue per user (ARPU), a key performance indicator for telecom firms, in the September quarter.
A report by Business Insider, quoting Jefferies, suggests that Bharti Airtel and Reliance Jio could announce a 10 percent increase in tariff in the last quarter of the fiscal years 2023, 2024, and 2025. As per the analysts, increasing pressure on the revenue and margins of the companies as well as moderate gains in average revenue per user (ARPU) are the major factors behind this price hike.
In the quarter that ended September, Jio’s ARPU reportedly increased 0.8 percent, while Vodafone Idea and Airtel reported an increase of 1 percent and 4 percent respectively.
The analysts further state that the rise in subscriber churn, which refers to the number of customers that stop paying for service in a given period, and mobile number portability (MNP) requests, are intimations of competition in the telecom space.
Airtel seems to have started implementing the price hike by withdrawing the Rs. 99 plan under which it offered 200MB of data and calls at the rate of Rs. 2.5 paise per second. Last month, the company reintroduced the Rs. 99 mobile phone service plan with a price hike of about 57 percent to Rs. 155. The new plan offers unlimited calling, 1GB data, Wynk Music access, and 300 SMS for 24 days. This pack is available in a few circles.
As per recent TRAI data, Jio added 7,20,000 wireless subscribers during September, while Bharti Airtel increased its mobile users count by 4,12,000. Vodafone Idea is facing a subscriber count decline by 40,00,000 and its base shrank to 24.91 crore. Both Airtel and Jio are currently leading in 5G deployment in the country.