The tariff hikes that telcos have announced could boost their EBITDA (earnings before interest, tax, depreciation, and amortisation) from wireless business in India by 20-25%, said ratings firm Ind-Ra. Jio was the first telco to announce the tariff hikes which was followed by Bharti Airtel and Vodafone Idea Limited (VIL). However, the effect of the tariff hikes won't show right away in the coming quarter. It will take at least six months, as many Indians prefer to recharge with long-term plans. It will also be crucial for the telcos to monitor the subscriber churn rate in the coming months as users may want to drop their secondary or additional SIM cards as the cost of keeping them active has become too high.
Read More - Jio, Airtel, and Vi: Advance Recharge Rules
Priyanka Bansal, Associate Director, Ind-Ra, said, "The tariff-hike bodes well for the telecom sector as it would not only reduce competitive intensity, but also help in improving the return on capital employed of the business post 5G investment."
The tariffs have moved up by 11-27% approximately by all the telecom operators. Jio hasn't hiked the tariffs for JioPhone users, and it will be interesting to see in the coming months whether it will or not. Interestingly, even to get the unlimited 5G, Airtel and Jio have modified their offer. The telcos have said that post-July 3, 2024, users will have to recharge with a 2GB daily data plan to get unlimited 5G.
Read More - Vodafone Idea Announces Tariff Hike, Get all Details here
It is worth noting that the telcos have allowed users to recharge in advance. Many users, to safeguard themselves from the effect of a tariff hike, are recharging in advance with the existing plans. However, the telecom operators have different rules for advance recharges and we have compiled all of them in a post you can check below.
