Mobile phone users may get a big shock after the Lok Sabha elections. The process of Lok Sabha elections is going on in the country during seven phases. Counting of votes will take place on June 4 after the final phase of voting on June 1. According to a news published in the Economic Times, the bills of mobile phone users will increase by around 25% after the elections. Telecom companies are gearing up for the fourth round of tariff hikes in recent years, according to news published in ET. After these steps of the companies, the revenue of the telecom companies will increase.
Mobile bills will become expensive after the Lok Sabha elections. The preparations for increasing the tariff have been completed by the telecom companies. This increase will be seen in both urban and rural areas. If reports are to be believed, there will be an increase in prepaid plans along with postpaid. Also, internet plans can also become more expensive than before.
General increase for city and village people
A report by brokerage Axis Capital said that companies are hoping for an improvement in profits after increasing competition and heavy 5G investment. A 25% increase is expected from the telecom operator in the near future due to government support. The report said that although the price hike may seem high, it is normal for people living in both cities and villages. However, people are using internet data and the cost is expected to come down.
ARPU of the company will increase to 16%
People living in cities spend 3.2 percent of their total expenditure on telecom. This will increase to 3.6 percent. On the other hand, the cost of telecom in the village will increase from 5.2 percent to 5.9 percent. The report also said that if these telecom companies can increase the basic plan price by 25%, their average revenue per user (ARPU) will increase by 16%. It means that Airtel's earnings per user will increase by Rs 29 and Jio's earnings will increase by Rs 26 per user.
Hope to increase to 100 rupees per user
Average revenue per customer (ARPU) from Jio for the quarter ended March 2024 is shown at Rs 181.7. Bharti Airtel's ARPU for the October-December 2023 quarter was Rs 208 and Vodafone Idea's (Vi) Rs 145. Piyush Vaish, TMT industry leader, Deloitte, South Asia, says that telecom companies will change the price of phone recharge packs to compensate for the costs incurred in 5G. According to him, a 10-15% increase in plan price can increase companies' ARPU by around Rs 100.
Indian Airtel and Jio will benefit the most
Vesh has also said that customers will not leave the telecom companies. Experts believe that Bharti Airtel and Jio will be the biggest beneficiaries of the increase in the price of mobile recharge packs. According to a report by Kotak Institutional Equities, rates have gone up by 14-102% after the last three tariff hikes. Both the telecom companies have increased their ARPU by 58% and 33% between September 2019 and September 2023 respectively.
Why growing?
According to the report, mobile recharge will increase by at least 25 percent. Telecom companies say that such a move is being taken with the aim of increasing Average Revenue Per User (ARPU). In simple words, the revenue is decreasing compared to the expenditure incurred by each user, due to which the tariff plan is being increased.
How much will the increase be?
Axis Capital estimates that the tariff plan could increase by 25 percent. In such a situation, a recharge of 200 rupees will become expensive by 50 rupees. Similarly, a recharge of Rs 500 will cost Rs 125. Bharti Airtel has a base price of Rs. There will be an increase of 29. Also, the base price of Jio recharge may increase by Rs 26.
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Jio in March quarter Rs. 181.7 estimated ARPU, Bharti Airtel's ARPU during October-December 2023 is Rs. 208, while the ARPU of Vodafone Idea (Vi) was Rs. was 145. ARPU will increase by 10-15 percent by the end of this calendar year. Telecom companies have almost tripled rates between 2019 and 2023.
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