Post-Election Impact: Mobile Phone Bills Expected to Surge by 25% in India, Reveals Report

According to a new report, telecom companies in India are looking to hike tariffs again, which could lead to higher bills for mobile phone users. According to a report by brokerage firm Axis Capital, mobile phone bills may increase to increase average revenue per user (ARPU) for telecom operators in the country. The report further suggested that an increase of around 25 percent is in the offing.

Phone tariff hikes can be manageable
Despite the increase in phone tariffs, the report suggests that the increase should be manageable for both urban and rural users, especially with continued demand for data services. Among urban households, telecom expenditure is expected to increase from 3.2 per cent to 3.6 per cent of total expenditure, while for rural consumers it will increase from 5.2 per cent to 5.9 per cent.

Axis Capital estimates that the expected 25 percent increase in headline rates will correspond to a 16 percent growth in ARPU for telecom giants such as Bharti Airtel (expected to reach Rs 29) and Reliance Jio (expected to reach Rs 26). "We expect a meaningful increase of around 25% by operators in the near term due to stable competitive environment, their need to improve profitability following heavy 5G investment and continued government support," a report by Media said. the brokerage firm said in a statement.

Piyush Vaish, TMT industry leader at Deloitte, South Asia, was quoted by ET as saying that operators are strategizing to monetize their 5G infrastructure investments by improving the tariff structure of bundled packages. It expects a 10 percent-15 percent increase in ARPU, per customer by the end of this year to around Rs. 100 will add, partly due to price adjustments for 4G/5G bundle packs and phasing out of low value plans.

Vaish elaborated that consumers tend to remain loyal to their providers as long as they show willingness to pay for telecom services. Analysts predict that Bharti Airtel and Reliance Jio will be the main beneficiaries of the wireless pack price hike.