The country’s top three telecom companies Vodafone, Airtel, and Jio are planning to increase mobile tariffs in the second half of the current financial year. This can show an increase of 20-25 percent in their revenue. Companies are of the view that if this is not done, they may suffer losses from investments in spectrum and networks. Domestic rating agency Crisil has given this information.
Companies are of the view that if this is not done, they may suffer losses by investing in spectrum and networks. Domestic rating agency Crisil has given this information.
Prepaid mobile users might soon have to pay more as telecom operators may be planning another hike in tariffs by Diwali 2022. A significant hike is expected, almost a year after last November’s hike in prepaid tariffs by Bharti Airtel, Reliance Jio, and Vodafone Idea.
5% reduction in profit
Crisil said in a report that companies were faced with a decrease in earnings per customer by 5 percent in the last financial year. Due to this, they have to take this decision. In the last financial year, the number of customers of these companies had come down as 370 million customers were inactive.
Rent was increased in November-December
From August 2021 to February 2022, the number of active subscribers of Reliance Dio was 94 percent. Bharti Airtel had 99 percent, active customers. Vodafone Idea lost 30 million active customers because it did not invest heavily in 4G services. Earlier, these three companies had increased fares by 20-25 percent in November-December.
The report by the Indian unit of US firm, William O’ Neil & Co’s head of equity research Mayuresh Joshi mentions that Airtel is looking to boost ARPU to Rs 200 while the targets for VI and Jio are Rs 135 and Rs 185 respectively.
Back in 2021, plans were hiked by the three telcos by as much as 20 to 25 percent. The hike resulted in low-cost popular recharge plans soaring to Rs 99 from Rs 79. 2G high-tier plan with a validity of 84 days from Airtel saw an increase of Rs 141, to Rs 839 from Rs 698.
Reports have suggested that the Airtel, Jio, and Vodafone Ideas might make the 10-12 percent tariff hike in order to boost the ARPU (average revenue per user) to Rs 200, Rs 185, and Rs 135 respectively.
Vi’s low-paying 2G customers are reportedly hurting the telco’s revenues, and strategies must be made to not just attract new customers, but also push legacy network users to upgrade to 4G services.