Your Phone Bills Are Likely to Spike 25% After Elections: What You Need to Know
Mobile phone users may see a significant 25% spike in their bills in the months following the general election, as telecom companies prepare for the fourth round of tariff increases in recent years. This move is expected to increase the average revenue per user (ARPU) for these companies.
According to Axis Capital, as quoted in ET, “We expect a meaningful hike of around 25% by the operators in the near term on the back of a stable competitive environment, their need to improve profitability following heavy 5G investment, and continued government support.”
The report suggests that, despite the size of the phone bills spike, it should be manageable for both urban and rural users, given the stickiness of data usage.
Urban households are expected to increase their telecom spending by 3.2% to 3.6% of their total expenditure, while rural subscribers will see an increase of 5.2% to 5.9%.
Axis Capital predicts that the 25% increase in headline rates will result in a 16% increase in ARPU for telecom operators, equivalent to Rs 29 for Bharti Airtel and Rs 26 for Jio.
Jio reported an ARPU of Rs 181.7 in the March quarter, while Bharti Airtel and Vodafone Idea (Vi) reported Rs 208 and Rs 145 for October-December 2023, respectively.
Peeyush Vaish, TMT industry leader at Deloitte South Asia, believes that operators will prioritize monetizing their 5G capex investments by adjusting the prices of bundled packages. “We expect a 10-15% increase in ARPUs to add around Rs 100 per subscriber by end of this calendar year, helped by price increase for 4G/5G bundled packs and phasing out of some low-value packs,” he stated. Vaish also stated that consumers are likely to remain loyal as long as they have high-speed connectivity.
Analysts predict that the wireless pack price increase will primarily benefit Bharti Airtel and Jio.
