The telecom operators are planning to introduce tariff hikes on their mobile plans. Airtel has already moved ahead with the tariff hike in 9 circles by removing the base Rs 99 plan from all of them and creating Rs 155 plan, the new base tier for customers. Consumers on the Rs 99 plan will have to pay 57% more now for the Rs 155 plan. While this is a good thing for the debt-laden and cash-strapped telecom industry, it could prove to be a negative for the rapid growth of digital services.
The Minister of State for Electronics and IT, Rajeev Chandrasekhar, said that rising prices of data and devices are a concern for the rapid proliferation of digitisation. Due to supply chain issues, the cost of smartphones is rising, and telecom operators are also looking to increase the tariffs. According to a PTI report, the minister is not exactly aware of the hike in tariffs by Airtel, but the ministry is looking to approach the sector regulator to study the effect that tariff hike will have on the consumers and whether it would leave a long-term or a short-term impact.
Airtel has become the first telecom operator in India to raise tariffs again in 2023. The telco is looking to hit its average revenue per user (ARPU) per month figure target of Rs 200 in the short-term and Rs 300 in the long term. To achieve that, Airtel wants low-paying customers to shift to higher-tier plans, and this move of scrapping the Rs 99 plan would aid the company in boosting its ARPU.
Following in the footsteps of Airtel, Vodafone Idea can also raise tariffs. Airtel's ARPU for Q2 FY23 was Rs 190. In the third quarter, the figure is expected to jump to Rs 194.