Cellphone Price Might Get Costlier By 30% : Report

If you think that telecom operators are not going to raise the price further, then there is bad news for you as there are high chances that telcos will increase it (tariffs prices) again. And now, they are likely to increase tariffs prices by 25- 30 percent, as their ARPU is very low at this point in time.

"With ARPUs still well below the Rs.180-200 pre-Jio levels and a reduction in overall telecom-related consumer spending (as a percentage of GDP) over the past three years, there's adequate scope for telcos to raise tariffs by another 30 percent later this year," Sanjiv Bhasin, director at IIFL Securities, was quoted by Economic Times.

In December, all telecom operators had increased tariffs of prepaid plans by 40 percent. This was the first time in three years ever since Reliance Jio came. However, this is adversely affecting Vodafone- Idea as the operator has lost millions of customers recently."Even after the recent tariff hike (in December 2019), consumers are still paying a paltry 0.86 percent of per capita income for their communication needs, which is much lower than what it was four years ago," Rajan Mathews, director-general of Cellular Operators Association of India (COAI) was quoted by the newspaper.

The report states that the people in India are not spending that much on plans, as people in Singapore, Hong Kong, Japan, and the United States are paying. Kotak Institutional Equities said consumers are spending very less amount on telecom services. In fact, there is a 21 percent decrease in spending. The experts also believe that the next round of price hike will play an important role in Vodafone-Idea. Furthermore, the company is planning to file a curative petition in the Supreme Court on the AGR issue.

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