Jio, Airtel, Vi May Hike Mobile Tariffs 12-15% in 3-4 Months

Reliance Jio, Bharti Airtel, and Vodafone Idea, India's three private telecom operators, are expected to increase mobile tariffs by 12 to 15 percent over the next three to four months, according to a report by Centrum Institutional Research.

The anticipated hike is driven by a combination of market consolidation, sustained 5G investment, and a favourable pricing environment. The report notes that the pricing environment has become more favourable with only three private operators and state-run BSNL in the market, giving the private players more pricing power.

The average revenue per user (ARPU), a key profitability metric for telecom operators, is expected to rise modestly even before any formal tariff hike is announced. Centrum expects the three private operators to report a 1 to 1.5 percent quarter-on-quarter increase in ARPU for the June quarter, driven by the migration of subscribers from 2G to 4G and 5G networks, postpaid customer additions, and a higher number of days during the quarter.

Heavy capital expenditure on 5G rollout across the country over the past two years has added further pressure on operators to improve returns, a factor analysts say is feeding into expectations of another round of price increases. The report also anticipates that Bharti Airtel and Reliance Jio will continue gaining subscribers, while Vodafone Idea works on expanding its 5G network.

If the increase lands around 12 percent, some of the most widely used prepaid plans could see a significant shift. For example, a 28-day plan currently priced at Rs. 349 could move to approximately Rs. 389, an 84-day plan currently priced at Rs. 899 could rise to around Rs. 1,007, and an annual plan currently priced at Rs. 3,599 could climb to roughly Rs. 4,031.

These figures are indicative projections based on a flat percentage increase, and the final revised prices will depend on how each operator chooses to restructure its individual plans. India's telecom operators have historically moved in step with one another on pricing, with one operator typically taking the lead and the others following within weeks.

The last major round of increases came in mid-2024, when Reliance Jio and Bharti Airtel raised their tariffs. The anticipated hike is expected to help the operators improve their returns and invest in their networks.

The hike, if it happens, will be the first industry-wide increase in about two years. It will be interesting to see how the operators restructure their plans and how the consumers react to the price increase.

In conclusion, the anticipated hike in mobile tariffs by Reliance Jio, Bharti Airtel, and Vodafone Idea is expected to have a significant impact on the Indian telecom industry. The hike is driven by a combination of market consolidation, sustained 5G investment, and a favourable pricing environment. The consumers can expect to pay more for their mobile services, but the operators are expected to improve their returns and invest in their networks.

The hike is also expected to have a positive impact on the Indian economy, as the telecom industry is a significant contributor to the country's GDP. The increased revenue from the tariff hike is expected to help the operators invest in their networks, create new jobs, and contribute to the country's economic growth.

Overall, the anticipated hike in mobile tariffs is a significant development in the Indian telecom industry, and it will be interesting to see how it plays out in the coming months.