Telecom Companies Follow Each Other’s Leads To Increase Prices From December 01
Delhi -Post a telecom reform package, an inevitable tariff hike is being seen on the horizon amongst the telecom service providers, confirmed reports are coming in. The telecom reform happened in September. This is indeed being seen as an important step towards improving the financial sustainability of the sector, analysts say.
India’s largest mobile service operator today stands as Reliance Jio. Ending the previous week, it has also decided to hike its rates by 20 percent joining industry rivals like Bharti Airtel and Vodafone Idea (Vi) which went for a price revision earlier last week.
Confirmed reports state that Jio’s new rates will come into effect from December 1. But in its formal press release, the Indian bigwig has released new unlimited plans. “Upholding the promise of providing the best quality service at the lowest price globally, Jio customers will continue to be the biggest beneficiaries,” it said.
In fear of losing customers, others weren’t not taking the plunge. But Airtel finally took the flight without a parachute and Vi has followed suit. After the telecom reform, these companies have indicated that the average revenue per user (ARPU) needs to go up to Rs. 200 initially and then to Rs. 300 to improve their financial health.
It is worth noting though, that, Jio’s proposed rate hikes are, however, slightly lower on some tariff plans. Obviously, this is because as the current market leader want to make a push to bag 500 million subscribers. According to Crisil ratings, given the high operating leverage of the sector, the current tariff hikes will lift the sector’s earnings before interest, tax, depreciation and amortization (Ebitda) by around 40 percent to more than Rs. 1 lakh crore in fiscal year 2023, compared to the financial year 2021.