Telecom Companies to Raise Tariffs Multiple Times, Aiming to Increase ARPU from ₹182 to ₹300
Mobile Telecom Services to Become More Expensive
Mobile telecom services will become more expensive. These companies will raise tariffs multiple times over the next 12 months. On July 3 this year, tariffs increased by 25%.
Revenue per User to Increase
According to CareAge Ratings, with this increase, the average revenue per user (RPU) of telecom companies Jio, Airtel, and Vodafone-Idea will rise by 15% to ₹182 to ₹220. The companies are preparing to take the RPU above ₹300.
India to Remain the Cheapest Telecom Market
Sunil Bharti Mittal, chairman of Bharti Enterprises, says, “Even after the revenue per user reaches ₹300, India will remain the world’s cheapest telecom market.”
Data Usage Quadruples in 10 Years
In the country, internet reach was only 13.5% in 2014, which will quadruple to 52.2% by 2024. Telecom industry revenue has increased by ₹1 lakh crore between 2018-19 and 2022-23.
Impact of 4G and 5G Services
After the launch of 4G services in 2016, tariffs were reduced, leading to rapid internet access growth in the country. The demand for features also increased. Now, 5G services have started. As technology advances, data usage also increases.
Companies Benefiting from Trends
Companies are trying to take advantage of this trend. In the financial year 2023-24, the total revenue of the telecom industry reached ₹2.4 lakh crore. In the last 10 years, the number of telecom companies has reduced from 22 to 5.
Tariffs to Increase by 36% in 7 Years
Bank of America believes that telecom RPU in India will increase by 13.6% to ₹250 in the next 5 years and by 36.4% to ₹300 in 7 years. Citi Research estimates that Airtel will increase tariffs the most in the coming years, reaching ₹270 by 2025-26 and ₹305 by 2027.
Revenue Increase Due to Tariff Hike
According to rating agencies, telecom companies are working on a roadmap to increase revenue per user by ₹80 in the coming years. CareAge Ratings stated, “According to our analysis, each ₹1 increase in RPU boosts the telecom industry’s profit by ₹1,000 crore.”
User Revenue Increased by 82% in 5 Years
According to Manish Sinha, Member (Finance), Department of Telecommunications, the average revenue per user for telecom companies was ₹100 in 2018-19. It increased to ₹182 in the financial year 2023-24. 86% of this was from 4G, and about 14% was from 5G.
Customer Base Changes
Telecom expert Mahesh Uppal said that in May this year, Jio’s customer base increased by 3.5 million and Airtel’s by 0.9 million. In contrast, Vodafone-Idea’s customer base decreased by 1.7 million in one month.
