After Jio, Airtel increases tariff across all categories

Vijay C Roy

Chandigarh, June 28

Brace to more for your mobile bills as a day after Reliance Jio, Bharti Airtel on Friday announced a hike in mobile tariffs by up to 21% effective July 3. With the hike, the plans will become dearer by 10-21 per cent across the prepaid and postpaid segments. On Thursday, Jio announced hike in tariffs by 12-27 per cent effective from July 3.

In the latest tariff increase announced by Airtel, the Rs 179 plan, which offers 2 GB data along with unlimited voice calling, has gone up 11 per cent, making it to Rs 199.

In a statement, Bharti Airtel stated that the mobile Average Revenue Per User (ARPU) needs to be upwards of Rs 300 to enable a financially healthy business model for telcos in India. “We believe that this level of ARPU will enable the substantial investments required in network technology and spectrum and offer a modest return on capital.

“In this light, we welcome the announcements in the industry to repair tariffs. Airtel will also revise its mobile tariffs as indicated below, from July 3. 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,” the statement stated. These prices will be applicable to all circles.

The latest move is in line with industry expectations of a tariff hike after the General Election. According to rating agency ICRA, the latest tariff hikes announced by telcos can yield additional operating profits of around Rs 20,000 crore for the industry once they were fully absorbed.

With an improved financial metrics, the industry will have the headroom to undertake deleveraging as well as fund capex for the technology upgrade, and network expansion, Ankit Jain, vice president and sector head of Corporate Ratings, ICRA said. ICRA expects the industry revenues to grow by 12-14 per cent in FY2025.