Your mobile plan could get pricier by year-end
What's the story
Mobile tariffs in India are expected to rise by 10-12% toward the end of this year, particularly impacting mid- and higher-paying consumers. The anticipated increase is mainly due to a sharp rise in active subscribers and continued net user additions. Industry executives and analysts have said that the recent surge in active subscribers has sparked telecom operators' interest in another round of tariff hikes.
Pricing strategies
Next hike may introduce tiered pricing
The next phase of tariff hikes could also witness the introduction of tiered pricing, where data allowances are drastically cut to encourage the purchase of additional data packs. However, analysts have warned that further increases could lead to higher subscriber churn. During the last hike in July 2024, base plan prices increased by 11-23%.
Subscriber growth
In May, India added 7.4 million active users
In May, India witnessed a record surge of 7.4 million active users, taking the total to nearly 1.08 billion. This was the fifth consecutive month of net user addition growth, recovering from a cumulative loss of 21 million between July-November. Reliance Jio Infocomm led the market with an addition of 5.5 million active subscribers in May, while Bharti Airtel added 1.3 million new ones during the same period.
Market trends
Future active user additions will depend on 5G expansion, adoption
An industry executive told ET that the recent record pace of active subscriber additions is not just due to acceptance of past tariff hikes but also the return of necessities-linked secondary SIMs. They added that future active user additions will depend on 5G expansion and adoption. Strong subscriber growth by top operators like Jio creates a favorable environment for future tariff increases, according to brokerage Jefferies.
Market strategy
Tariffs likely to go up by 10-12%
Targeting future price hikes in middle and upper-level plans will lead to consolidation, not attrition. A telecom industry analyst said, "It is likely that tariffs go up 10-12%... Future hikes are also unlikely to be uniform across all customer segments." BNP Paribas expects the Indian telecom industry's revenue growth to remain in double digits over FY25-27, driven by tariff hikes and customers upgrading to bundled plans.