Your mobile recharge could get costlier soon
What's the story
India's telecom sector is likely to witness a tariff hike of 12-15% in the next three to four months, according to a report by Centrum Institutional Research. The increase is attributed to market consolidation and an improved pricing environment. The report predicts that Bharti Airtel and Reliance Jio will continue gaining subscribers, while Vodafone Idea expands its 5G network.
Financial performance
Increment in ARPU for telecom operators
The report also predicts a 1-1.5% quarter-on-quarter increase in Average Revenue Per User (ARPU) for three private telecom operators in the June quarter. This is expected due to the migration of subscribers from 2G to 4G and 5G networks, postpaid customer additions, and a higher number of days during the quarter.
Subscriber growth
Subscriber market share changes
Centrum's report predicts that Bharti Airtel and Reliance Jio will continue to gain subscriber market share at the expense of Vodafone Idea. It estimates Reliance Jio will add around seven million subscribers quarter-on-quarter, while Bharti Airtel is expected to add about five million subscribers during the same period.
Network penetration
Data usage and broadband additions
The report also expects data usage per customer to remain strong as 4G/5G penetration continues across the country. It highlights that Reliance Jio and Airtel have covered over 90% of districts with 5G services. The two companies are also witnessing "strong traction in terms of 5G FWA and fixed broadband addition as penetration in the segment remains low."
Network expansion
Vodafone Idea's AGR dues reduced significantly
Vodafone Idea is also expanding its 5G footprint, with the report noting that the telco's 5G network is present in around 100 cities and it is ramping up its 5G coverage. The report also highlights that the company's adjusted gross revenue (AGR) dues have reduced significantly to ₹25,000 crore as present value of future AGR payment obligations.