Tariff hikes are inevitable. All the operators need it to sustain in the market comfortably. Even though Reliance Jio and Bharti Airtel posted net profits in the books, both the operators saw their average revenue per user (ARPU) falling quite steeply. However, there is one thing that needs to be addressed. Any tariff hike in the short term will look very insensitive on behalf of the operators.
Further, it would also make them come across as companies who don’t really care about their customers. This is not because telecom companies don’t have the right to increase tariffs; it is only that pushing for tariff hikes right now would be morally inconsistent with the operators’ recent statements with the plans offered to help customers.
Pandemic has Caused a Slowdown in Economy; Tariffs Should Stay the Same
The operators need to think not from a business point of view but also from a moral and ethical point of view. Businesses today have to keep goodwill in the hearts of the customers to stay respectfully in the market.
Because of the pandemic, a slowdown in the economy is evident. Further, the daily wage earners and low-income people won’t even be able to afford basic telecom services if the operators increase tariffs right now.
The operators, including Reliance Jio, Bharti Airtel, Vodafone Idea (Vi), and Bharat Sanchar Nigam Limited (BSNL), all have introduced offers to help people stay connected during the time of the pandemic.
Thus if the operators go for tariff hikes now, what would these offers mean in the first place? It is worth noting that both Airtel and Jio were waiting for gaining more market share before they can advance with the tariff hikes. If they have waited this long, they should wait more.
Note that none of the operators has actually said that they are going to go for tariff hikes instantly. But it is true that an increase in tariffs is in the books, and the operators must be planning in-house when to introduce it.
The only thing that the operators need to focus on right now is sustaining with what they have got, which is quite frankly a lot for both Airtel and Jio while Vi might be coming back to its feet slowly and BSNL already has the support of the revival package from the government. If the operators could wait this long for tariff hikes, they can surely wait a few more quarters.
So what’s the ideal time for tariff hikes? Maybe once the effect of the pandemic subsides, and the desperate nature of the Indian economy recovers.
