In a significant move within the telecom sector, Bharti Airtel, the country’s second-largest telecom operator, has announced a hike in mobile tariffs just a day after market leader Reliance Jio increased its tariffs. The revised plans, which will take effect from July 3, 2024, will see an increase of 10-21 percent across various plans.
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Sunil Bharti Mittal’s telecom firm stated that the price adjustment aims to maintain a financially healthy business model while minimizing the impact on budget-conscious consumers. The company emphasized that the increase is very modest, equating to less than 70 paise per day on entry-level plans.
"Airtel will also revise its mobile tariffs from July 3rd, 2024. We have ensured that there is a very modest price increase (less than 70p per day) on the entry-level plans, in order to eliminate any burden on budget-challenged consumers,” Bharti Airtel said in a regulatory filing.
In the category of unlimited voice plans, the new tariffs will be as follows:
The Rs 179 plan will rise to Rs 199.
The Rs 455 plan will increase to Rs 599.
The Rs 1,799 plan will jump to Rs 1,999.
Bharti Airtel has maintained that the mobile Average Revenue per User (ARPU) needs to be upwards of Rs 300 to support a financially sustainable business model for telecom companies in India.
This announcement comes on the heels of Reliance Jio’s tariff hike on June 28, 2024, where the leading telecom operator announced a 12-25 percent rise in tariffs for all mobile plans across prepaid and postpaid segments. Jio's move is expected to boost its ARPU, which had stagnated at Rs 181.7 for three quarters until March 2024. Additionally, Reliance Jio has restricted access to unlimited free 5G services for customers, aligning with sector expectations following the recent spectrum auction.
India has historically had one of the lowest telecom ARPUs globally, and these recent tariff hikes by major players signal a potential shift in the market dynamics.
In the latest round of telecom spectrum auctions, which concluded on June 27, Bharti Airtel emerged as the top bidder, securing 97 MHz of spectrum for Rs 6,856 crore. Reliance Jio acquired 14.4 MHz of spectrum for Rs 973 crore, while Vodafone Idea (Vi) purchased 50 MHz of spectrum for a total commitment of Rs 3,510 crore.
The telecom sector in India is poised for significant changes as operators adjust their pricing strategies and expand their spectrum holdings, aiming for sustainable growth and improved financial health.