Indians may have to pay more for recharging their phone numbers as a new report citing Jefferies as source, says that telecom operators including Reliance Jio and Bharti Airtel may hike the tariffs of their respective plans in the last quarter of fiscal year 2023, 2024, and 2025.
Reason behind tariff hike
“Mobile bills could go up soon as telcos are expected to hike tariffs by as much as 10%”. In Jefferies’ latest report, the brokerage says that Bharti Airtel and Reliance Jio are expected to announce 10% hike in tariffs in Q4 of FY23, FY24, and FY25.
The analysts say that the telcos have already reaped most of the benefits from the last tariff hike. “Their (Airtel & Jio) revenue and margins are increasingly under pressure. This necessitates a tariff hike by telcos”, analysts say.
For the September quarter, Airtel, Vodafone Idea and Jio reported moderate gains in average revenue per user (ARPU). While Jio’s ARPU increased 0.8% sequentially, Vodafone Idea and Airtel reported a 1% and 4% increase respectively.
Analysts at Jefferies also said that an increase in subscriber churn and mobile number portability (MNP) requests pointed to increasing competition in the Indian telecom sector. For those unaware, Subscriber churn refers to the number of customers that stop paying for a service in a given period.
According to the telecom subscriber data for October 2022 released by the Telecom Regulatory Authority of India (TRAI), Jio and Airtel together added 2.2 million new subscribers. On the other hand, Vodafone Idea saw a decline in count of subscribers by 3.5 million.
Back in November, Airtel already began its journey towards another price hike by scrapping the base Rs 99 plan which offered customers 99 Talktime and 200MB of data. However, the new entry-level minimum recharge pack of Rs 155, which replaces the Rs 99 plan, offers unlimited voice calling, 1GB of data and 300 SMS’es.