Mobile phone users may soon need to shell out more money for their recharge packs as telecom companies gear up for another round of tariff hikes. According to a report by brokerage firm Axis Capital, prices could surge by as much as 25% following the Lok Sabha elections. This increase is attributed to several factors including the competitive landscape, the need to boost profitability after substantial investments in 5G technology, and ongoing government assistance.
The impact of these potential hikes is expected to be felt across both urban and rural areas. Urban customers may see their telecom expenses rise from 3.2% to 3.6%, while rural users could experience an increase from 5.2% to 5.9%. Axis Capital estimates that the proposed 25% hike in rates could lead to a 16% growth in the average revenue per user (ARPU).
Reliance Jio, one of the leading telecom providers, reported an ARPU of ₹181.7 for the quarter ending March. Meanwhile, Bharti Airtel and Vodafone Idea have yet to disclose their March quarter numbers, but their figures for the October-December 2023 period stand at ₹208 and ₹145 respectively.
In terms of financial performance, Reliance Jio’s total assets at the end of Q4 FY24 were ₹4,87,405 crore, with net profit for the January-March period rising to ₹5,337 crore from ₹4,716 crore compared to the previous year. Bharti Airtel, on the other hand, recorded consolidated Q4 revenue of ₹37,599 crore, although net profit declined by 31.1% compared to the previous year.
With these developments, mobile phone users should prepare for the possibility of increased expenses for their recharge packs in the near future. As telecom companies navigate various challenges and investments, consumers may need to adjust their budgets accordingly to accommodate these changes.
