Indian Telecom Sector Tariff Hikes for Mobile Services are Nearby

indian telecom sector tariff hikes for mobile

The Indian telecom sector is struggling with cashflows due to low tariffs. For telcos such as Vodafone Idea (Vi), the current situation is even worse because, at the current tariff levels, their average revenue per user (ARPU) won’t see any meaningful growth. Amongst the private telcos, Vi’s ARPU is the lowest even though its tariffs are at the same level as Airtel’s. While the telcos were expected to raise tariffs in 2023, it didn’t happen, even after launching 5G and offering it for free to the customers.

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But in the calendar year 2024, the mobile network service tariffs will go up definitely. The telcos are waiting for the general elections to be over. That will likely happen in the Summer. So in the second half of the year, the telcos are strongly expected to raise the tariffs. Reliance Jio needs the tariffs to go up otherwise its ARPU growth will continue in a very slow manner like before. Airtel is comfortably sitting beyond the Rs 200 ARPU.

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How Much Tariff Hike is Expected in India?

Airtel is the only telco to surpass the Rs 200 ARPU mark in the current Indian setup. Airtel has already cleared its intent of moving first with the tariff hike. If the telco doesn’t see anyone else following, it will roll back the tariffs to ensure that its market share doesn’t decline. BofA Securities expects the telcos to hike the tariffs by more than 20%.