Reliance Jio, India’s number one telecom operator with a total subscriber pool of 400+ million users, had hiked prepaid tariffs back in December 2021. The overall effect of the tariff hike on Jio’s average revenue per user (ARPU) figure hasn’t arrived yet. This is because the telco has a lot of long-term users who will be recharging for the first time with the higher tariffs in Q1 FY23. It is also worth noting that a lot of Jio users took advantage of the company’s unlimited queuing facility to recharge multiple times with the older (lower price) tariffs.
Will Jio’s ARPU Touch Rs 200 Soon?
Bharti Airtel’s the king when it comes to ARPU right now in the telecom industry. According to an ET report, Nomura Research, in a note, said that Jio’s ARPU would inch up, and the full impact of tariff hikes implemented in December 2021 will be reflected in Q1 FY23 (April – June 2022).
It makes a lot of sense as well. There’s also the fact that in Q4 FY22, Jio’s ARPU grew at 10.6% sequentially, which was the highest growth rate for any of the telcos in the industry. All of Jio’s customers are 4G users. But there are a lot of low-paying 4G users as well. It is also worth noting that the ARPU gain in Q4 FY22 was majorly because of the removal of inactive users from the subscriber base.
Jio’s ARPU during Q4 FY22 was Rs 168. Will it reach Rs 200 soon is the question? Things will become much clearer once the ARPU figures for Q1 FY23 are revealed. Further, there are also tariff hikes being planned by the private telcos by the year-end. At the same time, Jio hasn’t hinted at any tariff hike; if Bharti Airtel and Vodafone Idea (Vi) increase tariffs, Jio will do that as well, to some degree. It is in the best interests of the business of the telco.
Jio’s active user percentage has improved significantly over the last six months, and it has boosted the telco’s ARPU in a major way. If Vi removed most of its active users as well, the telco would be able to report a higher ARPU figure without having the need for a tariff hike soon. But if there’s a tariff hike this year, Jio’s ARPU should comfortably cross Rs 200 levels by Q4 FY23.
