Reliance Jio and Airtel users may soon face higher phone bills: here's why
The potential price hike for Reliance Jio and Airtel users can be attributed to increasing pressures on the revenue and margins of the companies. In the September quarter, Airtel, Vodafone Idea, and Jio all saw moderate gains in average revenue per user
Your mobile bills may soon be on the rise as prominent telcos in the country are expected to increase tariffs by up to 10 per cent.
According to analysts at Jefferies (via Business Insider), the tariff of Bharti Airtel and Reliance Jio will see a periodic rise at the scale of around 10 per cent in Q4 of FY23, FY24, and FY25.
The potential price hike can be attributed to increasing pressures on the revenue and margins of the companies. In the September quarter, Airtel, Vodafone Idea, and Jio all saw moderate gains in average revenue per user (ARPU), a key metric in measuring a telecom company's performance.
Airtel has already started scrapping cheaper plans. The company withdrew the Rs 99 pack in select areas which was launched in alignment with the company’s rural expansion plans. Contrary to the desired results, the analysts believe that this strategy is likely to hurt margins further, as Airtel's EBITDA margin in Q2 fell to 36.9 per cent from 43.7 per cent in Q1.
The tariff hikes could also lead to higher competition in the market as there’s already an uptick in demand for number portability. On the other hand, overall subscriber intake has been stagnant, according to the report.
The companies are yet to announce the tariffs for 5G network in the country and are currently offering the services in select areas to select users. The 5G network is expected to deliver faster internet speeds across the country. Reliance Jio plans to cover all cities in India by the end of 2023.
Jio True 5G is currently available in Delhi-NCR, Mumbai, Kolkata, Varanasi, Chennai, Bengaluru, Hyderabad, Pune, Nathdwara and all 33 district headquarters of Gujarat with the Jio Welcome Offer.
Airtel has claimed that by the end of this year, it will have launched the service in all key metros and by the end of next year they will have 5G coverage across all major cities of India. (BussinessToday) reports
