India is soon going to see prepaid tariff hikes being implemented. Now we have been talking about this for quite a few days since Airtel removed the base Rs 99 plans from two circles. Airtel has softly invited Jio and Vodafone Idea (Vi) to join its efforts in pushing the industry tariffs forward. Now it just depends on Jio and Vi when they want to go ahead with the tariff hikes. But while the telcos are introducing 5G and bringing tariff hikes for 4G plans, they are not talking about how existing 4G services will be improved. Of course, if they have higher revenues and more profits, they will be able to reinvest more into the networks and improve performance. But India is yet to see seamless, and high-speed 4G coverage as users in some of the international countries get.
If consumers have to pay more for consuming the same quality of services, it is going to bring a huge gap in the market. This could be a bad thing for the existing operators as it would open up opportunities for new players to step in. I am highly doubtful if any conglomerate or an individual would like to invest in the Indian telecom market where the tariffs are extremely low to make quick returns, but it would definitely present an opportunity to a player like Adani.
Adani Group already has a unified license and 5G spectrum in its bag. While Adani Group has clarified that it will be focusing on the enterprise business only for now, it can quickly change plans if an opportunity presents itself. The 4G networks of the telecom operators still lack proper coverage in all parts of the urban cities and are mostly congested due to a lack of capacity. Will the 4G networks improve post the tariff hikes? Not necessarily. But the telcos definitely should work on improving coverage and capacity as fast as possible.
The effect of tariff hikes would also take at least two quarters to reflect on the revenues of the telecom operators. Thus, it would take some time for them to be able to benefit from it and implement that benefit into their networks.
