Airtel, Jio, and Vi not increasing recharge plan prices before 2024 polls
Pubnews Desk: Airtel, Jio, and Vi not increasing recharge plan prices before the 2024 polls. Indian telecom companies like Airtel, Vodafone Idea (Vi), and Reliance Jio have been rumored to raise the prices of their recharge plans. However, a new report claims that they will not take any such action until the next general election in 2024. Operators need to invest regularly to improve 5G services, and they wanted to increase the price of recharge plans as soon as possible. However, the upcoming general election is a hindrance. If the price of recharge plans is increased before the election, it can affect people at different levels. Telecom companies, led by Sunil Bharti Mittal, Akshay Mundra, and Mukesh Ambani, are forced to refrain from raising tariffs in full for the next year.
Instead, telco operators may make minor changes to their recharge plans to indirectly increase tariffs. For example, Airtel has already discontinued its entry-level recharge plan of Rs 99 per circle, after which the price of the company’s new base plan stood at RS 155. Jio and Vi may also follow Airtel’s path to increase their profit margins and ease the burden of additional costs on their shoulders.
The last tariff hike was at the end of 2021, and if the news is true, the next tariff hike will be done in two years, i.e., at the end of 2024. However, the Indian telcos’ revenue growth potential and average revenue per user (ARPU) will suffer if the plan prices are not increased. Vodafone Idea needs to increase tariffs as soon as possible in the current year as the company’s losses are increasing every quarter. Vi’s revenue graph to raise funds from outside investors is not quite what it should be. Hence the duty hike becomes necessary for Vi.
Despite the 5G network being launched in India in the third quarter of 2022, telecom operators are yet to take advantage of this next-generation network service due to tariff hikes. As every company is offering the benefits of 5G networks at the cost of 4G services, their operational costs have also become more expensive in the past few months. More investment will be needed to roll out 5G networks across the country over the next few years. If the tariff is hiked, only then will these needs be met, and telecom companies like Airtel, Vodafone Idea, and Reliance Jio will be able to increase their revenue margins.
The telecom industry in India has undergone significant changes in recent years, with the entry of Reliance Jio disrupting the market and leading to a price war among operators. This resulted in tariff cuts and lower ARPUs, hurting the profitability of telecom companies. The industry has also been facing challenges due to regulatory issues, high spectrum prices, and intense competition.
Despite these challenges, the Indian telecom industry has seen significant growth in recent years, driven by the rapid adoption of smartphones and the internet. The increasing demand for data services has led to a surge in data consumption and the need for faster and more reliable networks like 5G.
However, the high cost of 5G deployment and the need for significant investments have made it difficult for telecom companies to offer these services at affordable prices. The industry is also facing pressure from the government to invest in expanding network coverage in rural areas, which requires significant investment but has limited revenue potential.
To address these challenges, telecom companies in India need to focus on increasing their ARPUs and improving their profitability. One way to do this is by increasing tariffs, which will help them offset the high cost of deploying 5G networks and improve their revenue margins. However, they need to balance this with the need to remain competitive and offer affordable services to their customers.