The private telecom operators in India might increase the prepaid tariffs by 10% to 12% by Diwali. This means that the tariff hikes might come by October or November 2022. Analysts believe that with this tariff hike, the average revenue per user (ARPU) figure would go up by another 10%.
According to an ET Telecom report, Mayuresh Joshi, head of equity research at the Indian unit of US equity research firm, William O’ Neil & Co, said that the telcos would go for another prepaid tariff hike of 10%-12% and would potentially boost the ARPU of Bharti Airtel, Jio, and Vi to Rs 200, Rs 185, and Rs 135, respectively.
Bharti Airtel and Reliance Jio to Add Most Customers in FY23, Vi’s Performance to be Modest
Because of a stronger 4G network across the country, analysts believe that Bharti Airtel and Reliance Jio are going to add most of the customers in FY23. Vi’s performance in the subscriber addition is expected to be modest at best as the telco is struggling to raise funds via external investors.
The tariff hike for prepaid plans would allow Bharti Airtel to reach its short-term goal of Rs 200 ARPU figure. But in the medium-to-long run, Airtel wants its ARPU to surpass Rs 300 level. This means that over the coming years, we are going to see multiple more tariff hikes.
Vodafone Idea is expected to follow Airtel in its strategy of tariff hikes. The more Airtel increases tariffs; the more Vi would do the same.
Even after another tariff hike this year, Vi’s ARPU might not cross the Rs 150 figure, which is an alarming thing for the investors of the company.
The telco’s low-paying 2G customers are hurting its revenues. Vi needs to figure out a way to attract more customers and also push legacy network users to upgrade to its 4G services for better revenues.