Jio Needs Tariff Hikes to Improve ARPU After Q3 and Q4 Flattish Growth

One upper hand that Jio and Airtel have over Vi here is that they are the only ones providing 5G network services, that too for no additional cost to their 4G subscribers. This way, Jio's ARPU is not going to cross the Rs 200 figure. Jio has never been about keeping the higher ARPU in the industry, it wants to be the largest player in terms of scale.

Highlights

  • Reliance Jio hasn't been performing really well in the average revenue per user (ARPU) department for the last two quarters.
  • During Q2 FY23, Jio's ARPU was Rs 177.2.
  • It went up to Rs 178.2 during the next quarter, and in Q4 FY23, it became Rs 178.8.

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Reliance Jio hasn't been performing really well in the average revenue per user (ARPU) department for the last two quarters. During Q2 FY23, Jio's ARPU was Rs 177.2. It went up to Rs 178.2 during the next quarter, and in Q4 FY23, it became Rs 178.8. While the revenues and the net profit have improved, the ARPU needs to go up as well for the telco to maximise revenues. For that, a prepaid tariff hike is needed for Jio. Airtel has already taken the first step towards tariff hikes by removing the base plan of Rs 99 from all circles and then making the new base tariff the Rs 155 plan. Jio frankly needs to make a move as well.




It is Vodafone Idea (Vi) that is actually also playing a key role in the delay of the tariff hikes here. Vi knows that it can't increase tariffs right now because it would increase the subscriber churn rate even further. The telco simply can't afford paying customers leaving its network anymore. Thus, it won't raise tariffs. Until it raises tariffs, Jio and Airtel can't go the full way either because that could lead to Vi gaining their low-paying customers.

Read More - Jio Net Profit at Rs 4984 Crore in Q4 FY23, ARPU at Rs 178.8

One upper hand that Jio and Airtel have over Vi here is that they are the only ones providing 5G network services, that too for no additional cost to their 4G subscribers. This way, Jio's ARPU is not going to cross the Rs 200 figure. Jio has never been about keeping the higher ARPU in the industry, it wants to be the largest player in terms of scale. That's why the telco never really talks about ARPU or tariff hikes. But it will have to maximise revenues to ensure that its 5G capex can be justified in the short term.

The thing is that mobile prepaid packs aren't allowing for a lot of upselling right now. The only upsell that Jio can make through mobile prepaid packs is the data vouchers, which also many living under the 5G network zone with the Welcome Offer might not require as they get unlimited data. Thus, the telco is in dire need of a tariff hike to improve ARPU and also maximise revenues.

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