Mobile Recharge Costs Could Surge by 17%: Anticipate 5-10% Extra for 5G Services, Telecom Firms Eye Tariff Hikes from June-July

Telecom companies are gearing up to increase tariffs on various mobile service plans. According to reports from Antique Stock Broking, there could be a hike of 15-17% in mobile service tariffs this year. At the same time, Jio and Airtel may discontinue offering unlimited data to their premium users.

Companies may make decisions to hike tariffs by June or July. Some analysts believe that mobile phone services could become 20% more expensive. Additionally, charges for 5G services may see a 5-10% increase compared to 4G services during the same period.

Telecom Companies to Increase Tariffs Within 2-3 Weeks

In terms of market share, India’s second-largest telecom company, Bharti Airtel, is seeking to increase its Average Revenue Per User (ARPU) from Rs. 208 to Rs. 286, over the span of three years. 

For this, the company may hike tariffs by approximately Rs. 55. Additionally, Jio may witness a 15% increase in its tariffs this year.

Efforts to Offset Lower Returns on Investment

According to Bank of America, Indian telecom companies are spending a significant amount on acquiring 5G spectrum. 

However, their returns on capital employed (ROCE), meaning earnings in proportion to expenditure, are considerably lower. This is largely due to the limited profitability of subsidized plans offered by these companies.

Tariff Hike Implemented in November 2021

The last tariff hike in mobile plans occurred in November 2021. At that time, Vodafone Idea increased tariffs by around 20%, while Bharti Airtel and Jio raised their tariffs by as much as 25%.