Tariff Hike Could Impact Data Consumption In India: Report

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All telecom operators have finally increased tariff plans to improve the financial health of the ailing sector. But now analysts at brokerage firms informed that this will help them (Airtel, Vodafone Idea, and Reliance Jio) to increase their average revenue per user (ARPUs).

Tariff Hike Could Impact Data Consumption In India: Report

 

On the other hand, analysts pointed out that this hike will have an impact on data consumption in the country. While Vodafone Idea and Airtel have implemented new prices starting today (December 3rd), Reliance Jio will announce new plans in the coming days.

This means that all mobile customers will have to pay up to 40 -42 percent more to use data and to make calls in the country. "Our working shows Bharti's blended ARPU increasing by 21 percent to Rs 156 from Rs 128 and VIL's too by 21 percent to Rs 131 from Rs 107," brokerage firm, ICICI Securities, said in a statement.

Meanwhile, Economic Times reported that there are chances of Jio's announcement on tariffs will improve the overall health of the industry. "We now expect more tariff increases over the next 12-18 months," it said, adding that it expects a 55 percent ARPU increase by FY22 end compared from September 2019, Credit Suisse said in a statement.

"We expect Bharti Airtel's and Vodafone Idea's 4QFY20 EBITDA to increase by 15 percent and 54 percent QoQ while for FY21 we are building in 29 percent and 49 percent YoY growth in EBITDA respectively due to the price hikes," the firm added.

It is worth mentioning that the Department of Telecom has also supported this decision of private operators. Telecom Minister Ravi Shankar Prasad has tweeted that "India's mobile internet rate per GB remains by far the lowest in the world." On the other hand, the state-run telecom BSNL operator has not announced any hike yet. But we can expect that the company will announce new rates soon.

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