Telecom operators in India have been waiting eagerly for the central elections or the Lok Sabha elections to be over. This is because they can only go for tariff hikes after that. The last time the Indian telecom sector witnessed a tariff hike, there was an increase of around 20-25% in the pricing of almost every plan.
This time, according to an analyst (via RepublicWorld), the telcos will increase the tariffs by 15-17%. The elections will be over around June 1, 2024. The telco that is likely going to take the lead in increasing tariffs will be Bharti Airtel. While Airtel has been slowly increasing baseline tariffs in a phased manner, the telco has time and again affirmed its intention to raise tariffs.
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Airtel believes that the telecom sector in India doesn’t have healthy benefits. What the telco means is that the investment for the companies is extremely high, while the returns are very low. With the next tariff hike, Airtel is likely going to cross the ARPU (average revenue per user) figure of Rs 250 before the end of FY25.
It is also worth noting that none of the telcos are monetising 5G yet. But the day isn’t too far when consumers will have to pay a little extra to consume 5G network services. For now, it is free for both prepaid and postpaid consumers.
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Vodafone Idea (Vi) also needs the tariff hike badly. The telco’s ARPU is growing very slowly. The same is the case for Reliance Jio. Without a tariff hike, these telcos will not be able to improve ARPU majorly like Airtel because they have a high quantum of low-paying customers in their subscriber mix. For Jio, the ARPU growth has been flat for several consecutive quarters now
