Your phone bills might go up by 10-12% soon
What's the story
India's telecom sector is gearing up for a fresh wave of tariff hikes, with an expected increase of 10-12% in the next three to six months. The prediction comes from Gaurav Malhotra, Executive Director at Axis Capital. The new timeline differs from earlier expectations that a hike would come in the first half of this year.
Impact
Airtel's ₹299 plan discontinuation delayed industry-wide hike
Malhotra noted that Bharti Airtel's recent decision to discontinue its ₹299 prepaid plan has delayed the expected tariff hike.
The entry-level price has now been raised to ₹349, an effective increase of around 16%.
He said it would take over a quarter for this change to fully reflect in revenue numbers, pushing back the timeline for industry-wide price hikes.
Price influence
Previous tariff hikes' impact on operator revenue
The potential for a broader tariff hike also hinges on how previous increases have been reflected in operator revenue.
Back in 2019, Bharti Airtel's first major tariff hike was around 30%, but its average revenue per user (ARPU) only increased by 15%.
However, the latest round of price hikes saw a nearly equal rise in ARPU with no significant subscriber loss.
Subscriber growth
Vodafone Idea reports 1st net subscriber addition since merger
In a positive turn for the sector's most troubled player, Vodafone Idea has reported its first net subscriber addition since its 2018 merger.
The company is also witnessing rising data usage as it invests in its 4G network.
Malhotra said "We are seeing subscriber increase for the first time since the merger," adding that improving operating metrics and a recent capital infusion from promoters strengthen Vodafone Idea's case to raise fresh debt for network expansion.