Bharti Airtel and Vodafone Idea, the second and third largest telecom operators of India, might just increase the tariffs for their offerings. According to an ET Telecom report, both the telcos might introduce increased tariffs in an ‘indirect’ manner.
‘Indirectly’ here means that the telcos might keep the overall pricing of the plans the same as they are now but reduce the benefits they come with. So essentially, you will be paying the same amount of money for lesser data and calling benefits.
But this is not all; the telcos might just make all the prepaid plans that comprise of tax at the moment, ‘pre-tax’. This would effectively increase the overall prices for the plans.
Indirect Tariff Hike Might Create Unnecessary Confusions for Consumers
According to Kunal Vora, senior telecom analyst, the indirect tariff hike might contribute to unnecessary confusions for consumers.
PhilipsCapital expects that changing the current plans and making them ‘pre-tax’ would amount to an effective increase of 18% on the plan’s prices. Further, some analysts believe that if the telcos were to charge tax separately, it would result in a customer churn rate.
This is because 95% of the consumers in India are price sensitive. Jio might just become the telco of choice for consumers if Vi and Airtel increase the tariffs indirectly.
Further, customers would feel cheated if the telcos offer fewer benefits for the same price with the plan.
Amidst all this, Vi is expected to target a higher market share. For doing that, the telco is expected to keep offering plans for the same tariffs for the ongoing and the coming quarter. The telco is not expected to increase the tariffs until Q3 of 2021.
As for Airtel, this wouldn’t be the best move for the telco since it has been growing subscribers at an increasing trend quarter after quarter. If it does this, there is a huge chance that a large percentage of users would go to Jio, and its growth rate might subside.