Phone Bills To Surge By 25% Soon: Report

The bill of mobile phone users would undergo about a 25 percentage increase after the Lok Sabha elections. The telecom companies are planning to increase the fourth round of tariffs in recent years. The move would also raise the companies” average revenue per user (ARPU), reports Times of India, quoting a brokerage Axis Capital report.

The report stated that it expects a meaningful hike around 25 percentage by the operators in the near term. The report cited the operator”s need to improve profitability after heavy 5G investment in the market and continued government support. It also added that the hike could be manageable for both urban and rural users. Telecom companies hiked rates thrice between 2019 and 2023.

Operators reportedly devised the hike plan to monetise their 5G infrastructure investments by revising tariff structures of bundled packages, Times of India quotes TMT industry leader Peeyush Vaish. Peeyush Vaish expects a 10-15% increase in ARPUs, adding approximately Rs 100 per subscriber by the end of this year, partly due to price adjustments for 4G/5G bundled packs and the phasing out of low-value plans. 

Peeyush Vaish also stated that the customers would not leave their network providers as long as they enjoy high-speed connectivity, noting that they would be willing to pay for telecom service. 

The 25 percentage hike would result in a 16 percentage increase in ARPU for telecom operators, Rs 29 for Bharat Airtel, and Rs 26 for Jio, the report calculated. 

According to analysts, Bharti Airtel and Jio would be the primary beneficiaries of the wireless pack price hikes. A Kotak Institutional Equities had indicated that Bharti Airtel and Jio witnessed a 58% and 33% surge in ARPU respectively between September 2019 and September 2023. The surge was reported after three successive tariff increases ranging from 14 percentage to 102 percentage.