Tariff Hike to Negatively Impact Subscriber Addition and Data Growth, But Will Raise ARPU

The last three days in the telecom industry have all been about the data tariff hike. For the first time in a long time, the telecom companies have all taken the step to hike tariff for the subscribers by as much as 40%. Vodafone Idea, Reliance Jio and Bharti Airtel have announced that they would be charging more for their prepaid plans in a few days. While Bharti Airtel and Vodafone Idea will implement the new price hike on December 3, Reliance Jio will be bringing the new All-in-One plans with 40% hike on December 6 for the consumers. With all this happening in the industry, there is bound to be a big change on the business side of things as well for the telecom operators. As per a new ET Telecom report, the companies are sure to improve their financial health helped by the tariff hike and they will also witness a rise in their Average Revenue Per User (ARPU).

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Telcos to Witness Sharp Rise in ARPU

The analysts, however, have also said that this tariff hike will effect the data growth as well, which has been rising on the back of the fact that India has the cheapest data rates of all countries in the world. After this tariff hike, almost a billion subscribers in India would be required to pay more than 40% for the same plans. Amidst this, it is also crucial to note that Bharti Airtel, Reliance Jio and Vodafone Idea, all have increased prices for their prepaid subscribers which make up for the 90% of their Toal subscriber base. Reliance Jio, which boasts of having the most subscribers with over 355 million subscribers in its base, will also be affected with the new tariff hike as it brings the new change on December 6.