Telecommunications companies Bharti Airtel and Reliance Jio will increase their rates by 10%, says Jefferies: report
Users may have to shell out more for mobile top-up plans in the coming years. Telecom companies in India will raise their tariffs by up to 10% by March next year, investment bank Jefferies has reportedly said. Bharti Airtel and Reliance Jio are expected to increase their rates in the last quarter of fiscal 2023, 2024 and 2025. Growing pressure on corporate revenues and margins will likely be the main reason for the rate hike. India’s three major telecom companies saw moderate gains in average revenue per user (ARPU), a key performance indicator for telecom companies, in the September quarter.
A Business Insider report, citing Jefferies, suggests that Bharti Airtel and Reliance Jio could announce a 10% price increase in the last quarter of fiscal years 2023, 2024 and 2025. Analysts say mounting pressure on revenue and Corporate margins along with moderate gains in average revenue per user (ARPU) are the main factors behind this price increase.
In the quarter ending in September, Jio’s ARPU reportedly increased by 0.8%, while Vodafone Idea and Airtel reported an increase of 1% and 4% respectively.
Analysts further state that the increase in subscriber churn, which refers to the number of customers who stop paying for the service in a given period, and requests for mobile number portability (MNP), are indices of competition in the telecommunications space.
Airtel appears to have started to implement the price hike by withdrawing the Rs. 99 plan under which it offered 200MB of data and calls at the rate of Rs. 2.5 paise per second. Last month, the company reintroduced the Rs. 99 mobile phone service plan with a price hike of around 57 percent to Rs. 155. The new plan offers unlimited calls, 1GB data, Wynk access Music and 300 SMS for 24 days. This pack is available in a few circles.
According to recent TRAI data, Jio added 720,000 wireless subscribers in September, while Bharti Airtel increased mobile users by 412,000. Vodafone Idea is facing a drop in subscribers of 40,000,000 and its base shrunk to 24.91 crores. Airtel and Jio are currently leading the rollout of 5G in the country.
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