Jio rings in up to 25% tariff hike; Airtel, Vodafone Idea may follow suit | Company News
After around 30 months, the telecom industry is witnessing a significant tariff increase. Market leader Reliance Jio took the first step on Thursday by announcing 12-25 per cent rise in tariff across the board for mobile plans, in both prepaid and postpaid segments. The move, which follows a tepid round of spectrum auction, is expected to shore up the telco’s monthly average revenue per user (Arpu), which had stagnated at Rs 181.7 for three quarters until March 2024. Over the years, India’s telecom Arpu has been among the lowest in the world.
The latest tariff increase by Jio could trigger a potential domino effect among the other two major private-sector telcos in the country— Bharti Airtel and Vodafone Idea — industry sources told Business Standard. Till the time of going to press, these telcos had not made any announcement on tariff changes.
The last major industry wide tariff increase had been rolled out in December 2021, when average prices had gone up 20 per cent.
Bharti Airtel had led the increase at that point.
In the latest tariff increase announced by Jio on Thursday, the Rs 155 plan, which offers 2 GB data along with unlimited voice calling, has gone up 22 per cent. That raises the price of Jio’s cheapest monthly plan to Rs 189. Other plans ranging from Rs 209 to Rs 399 have been raised by more than 12 per cent.
In the postpaid segment, generally considered a premier category, the Mukesh Ambani-promoted telco has raised tariffs of its Rs 299 and Rs 399 plans by 16.7 per cent and 12.53 per cent, respectively, to Rs 349 and Rs 449. Prices of plans in the annual and data add-on categories have also been raised. “The introduction of new plans is a step in the direction of furthering industry innovation and driving sustainable growth through investments in 5G and AI (artificial intelligence) technology. Ubiquitous, high-quality, affordable internet is the backbone of Digital India and Jio takes pride in contributing to this. Jio will always put our country and customers first and will continue to invest in India,” Reliance Jio Infocomm Chairman Akash M Ambani said in a statement.
Jio’s rivals have been raising the tariff issue for long. In May, Bharti Airtel Chief Executive Officer (CEO) Gopal Vittal had said a substantial rise in mobile tariffs was needed in India, and the market was ready to absorb it over time. That same month, Vi CEO Akshaya Moondra had said that rather than focusing on the entry-level segment, any tariff increase should focus on usage volumes and paying more for using more.
Impact on 5G
As of April-end, Jio had a 40.48 per cent share of wireless subscribers in India, official data shows. As many as 472.42 million of the 1.16 billion total mobile phone connections in the country run on the Jio network.
The tariff increase is expected to influence the pace of adoption of 5G in the country. Both Jio and Airtel have offered 5G services at 4G prices. Jio had 108 million 5G customers at the end of fourth quarter (January-March) of 2024-25, while Airtel had 72 million subscribers.
The telco has, however, said users of JioBharat and JioPhones will continue to enjoy the existing tariffs. “Even today, 250 million feature phone users in India remain stuck in the 2G era, unable to access digital services. To empower these users with a Digital Life, 4G-enabled JioBharat/JioPhone was introduced,” the company said. Six years after first unveiling a 4G-enabled feature phone, Jio had launched the new JioBharat phone, priced at Rs 999, in July 2023.
First Published: Jun 27 2024 | 7:31 PM IST
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