Tariff Hike: Airtel, Jio and Vodafone Idea to End Cheap Mobile Data and Voice Calls

Indian telecom industry is going to enter the tariff hike phase and Bharti Airtel is expected to make the most benefit out of the move

By June 10th, 2020 AT 7:04 AM

The Indian telecom industry hasn’t been the same since the time Reliance Jio introduced its free voice calling and unlimited data services. Jio came to the market back in 2016 and has captured the highest market percentage. The telco has over 388 million subscribers. Right below it stands Bharti Airtel. It used to be the number one telco in India but Jio took that place. Looking at Jio, every telco in India had to reduce the costs of their plans. This resulted in a lot of losses for many telcos to ensure that they don’t lose their existing customers to Jio. Jio has made the calling and data services very cheap and while it has benefited the users, it wasn’t the best thing for the telecom industry of India. But according to a recent report from Jefferies, things are about to take a good turn for the Indian telecom industry.

Distress in the Indian Telecom Industry

After the telcos adjusted to the new market expectations that Reliance Jio had created, they were served a notice by the court. All the telcos in India were asked to clear their Adjusted Gross Revenue (AGR) dues. This further added to the distress of the telcos. Jio didn’t face a lot of problems due to the court order since it is fairly new and its AGR dues are comparatively nothing like that of other telcos. Airtel at the same time has been asked to pay $3 billion to clear its dues. Vodafone Idea isn’t having the best time in the market as well.

Tariff Hike to Help Telecom Industry

In the near future, it is expected that there will be a tariff hike introduced by all the telcos in the Indian telecom industry. The revenues for the telcos from their mobile users are going to grow as such that it may doubly by FY25. It is expected to grow even after that. A deep analysis of around 25 markets suggests that the Average Revenue per Indian user (ARPUs) in India will become grow to USD 38 billion. Bharti Airtel is the telco which is expected to benefit the most from the tariff hike. At present, the mobile revenues-to-GDP for India is one of the lowest standings at 0.7% when compared with around 25 countries.

But after the tariff hike phase comes to the India telecom industry, it will sustain. Not only that, but it will also even grow by 3% to 5% every year for the foreseeable future. It is the same trend as of the Fast Moving Consumer Goods (FMCG) industry.

The Indian telecom industry has been gaining a lot of traction from the US tech giants. Reliance Jio has attracted over $10 billion investments from companies such as Facebook, Silver Lake, KKR and many more. At the same time, as per a Reuters report, Bharti Airtel might see investment from Amazon of over $2 billion for a 5% stake in the company.

Tanay is someone with whom you can chill and talk about technology and life. A fitness enthusiast and cricketer, he loves to read and write.

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