Telecom companies are gearing up for the fourth round of tariff hikes in recent years, signalling a move that is expected to bolster their average revenue per user (ARPU) significantly.
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Mobile phone users across the country would soon bear the increase in their bills following the upcoming general election. Telecom companies are gearing up for the fourth round of tariff hikes in recent years, signalling a move that is expected to bolster their average revenue per user (ARPU) significantly.
Reasons Behind the Hike
According to the ET report, The telecom operators are projected to implement a substantial increase of approximately 25 per cent, attributing it to a stable competitive landscape, the imperative to enhance profitability post-heavy investments in 5G infrastructure, and ongoing governmental support.
Impact on Consumers
While the prospect of a 25 per cent hike may seem daunting, the report suggests that it should remain manageable for both urban and rural users. Notably, the increase in spending on telecom services is expected to rise to 3.6 per cent of total expenditure for urban households, compared to the current 3.2 per cent. Similarly, for rural subscribers, this figure is anticipated to climb to 5.9 per cent from the current 5.2 per cent.
Revenue Growth for Operators
The anticipated surge in headline rates is projected to translate into a notable 16 per cent growth in ARPU for telecom operators. Based on the impending tariff adjustments, Axis Capital estimates an increase of Rs 29 for Bharti Airtel and Rs 26 for Jio.