Breaking News: Telecom Giants Hike Tariffs to Improve Bottom Lines

NEW DELHI: Following Reliance Jio’s recent announcement, Bharti Airtel and Vodafone Idea have decided to raise their tariffs by over 20% each in an effort to boost their bottom lines affected by fierce competition in the telecom market.

Bharti Airtel has increased tariffs by 10-21% across various plans, while Vodafone has implemented a hike of 13-27%. According to ratings agency ICRA, these tariff hikes could potentially generate an additional operating profit of around Rs 20,000 crore for the industry once fully absorbed. This move will provide the industry with the financial stability needed to reduce debt and invest in technology upgrades, network expansion, and other capital expenditures.

The price rise by Jio is expected to increase its monthly average revenue per user (Arpu) by approximately 17% over the next year, according to estimates by Morgan Stanley. Jio, helmed by Mukesh Ambani, reported an Arpu of Rs 182 during the January-March quarter, while Airtel’s Arpu stood at Rs 209 at the end of the last quarter. Airtel aims to reach an Arpu of Rs 300 per user, which it believes will allow for substantial investments in network technology, spectrum, and provide a decent return on capital.

Overall, these tariff hikes mark a significant shift in the telecom industry landscape and are set to bring about positive changes in the financial performance and future prospects of major players in the market.