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Airtel, Jio and Vodafone Idea to raise tariffs again
Airtel, Jio and Vodafone Idea to raise tariffs again
As per a Crisil report, users of Airtel, Reliance Jio and Vodafone Idea might have to pay more for the same services as telecom operators aim to increase their revenue by 20-25 percent by FY23.
Life can be challenging for Airtel, Reliance Jio and Vodafone Idea users in India as they may soon be forced to shell out more money. According to a report, the country's top three private telecom operators may raise rates again in the second half of FY23 (current fiscal year) to target 20-25 percent revenue growth. The report suggests that an increase in average revenue per user is considered critical for telcos to maintain their profitability, or they may decline the services they offer. It is also believed that the price increase may also be related to the upcoming 5G spectrum. Either way, if this happens, it will likely add a burden to consumers when rising fuel prices are already burning a hole in their pockets.
This report comes from the national rating agency Crisil, which was published on May 31. The likely price increase will add an impressive 20-25 percent revenue growth for these telecom service providers, expanding their profit margins by 1.80-2.20 percent in FY23. It's worth noting that Airtel, Reliance Jio, and Vodafone Idea have raised rates steadily since December 2019, after intense competition.
Airtel, Reliance Jio and Vodafone Idea may raise tariffs soon
The report also highlighted that telcos would increase their average revenue per user (ARPU) by 15-20 percent in the fiscal year. This will be due to the cumulative effect of last year's rate increase, where companies increased prices by about 5 percent and the new rates that will be introduced soon. It is worth noting that according to the report findings, the price increase of Airtel, Reliance Jio and Vodafone Idea may come at the end of June.
This increase in ARPU is likely to remove some of the burdens for telecom operators. They are also expected to upgrade the network and regulatory Capex in FY23. Moreover, with the 5G spectrum just around the corner, telecom service providers will likely seek revenue growth to capture lucrative circles.
The total number of mobile subscribers in India sank in the previous fiscal year. This happened when mobile operators removed inactive users to provide more transparency around the numbers, the report noted. However, the number of active subscribers of the three private telecom companies increased by 3 per cent as they added Rs 2.90 crore, new active subscribers, to the list.
