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Another tariff hike likely by telecom operators to recover investments

Anticipate paying more for calls and internet usage in the next year as telecom providers Bharti Airtel, Vodafone Idea, and Reliance Jio will get into tariff hike.

Conversation between four friends, dated December 2021, about telecom’s tariff hike

Priya: Yaar! You know, yesterday I was trying to recharge my Airtel number with Rs.149, and it displayed the message “This plan is discontinued by Airtel”, and now the same benefits will be received by paying Rs.179. I’m very angry and decided to port my number to another telecom operator! What do you say?

Naman: Aree! Kind of similar thing happened to me a few days ago! My Jio plan of Rs.129 is now available at Rs.155. I was also thinking to change my operator. What’s your take on this matter, Nitin?

Nitin: Guys, not only Jio and Airtel, but the entire telecom industry is on the way towards increasing the prices. My Vodafone Idea Rs.299 plan is now available at Rs.359.

Om (The Math Guru): That means the top three telecom operators of the country Airtel, Jio and Vodafone Idea have increased their tariff rates in the range of 20-25%. Hmm! Let’s see, maybe this is just for one time and it will boom our telecom industry.

Feeling a bit disappointed by this conversation; read more to get even devastated.

Think again if you assume that mobile data tariffs are unlikely to rise very soon. After implementing a 20-25% tariff hike nearly 6 months ago, all of the big telecoms – Bharti Airtel, Reliance Jio, and Vodafone Idea – are now planning more hikes in 2022 to bring the average revenue per user (ARPU) to Rs.200 and subsequently to Rs.300. And if you think this is just a mere second attempt, read deep about these hikes; these hikes are consistent on spurge from last four years, and the common man’s pocket is their biggest enemy.

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Following years of severe competition caused by the advent of the strong Reliance Jio, the telecom sector began raising tariffs in December 2019. The highest tariff hike occurred in 2019, with 50-60%, but the telecom’s hands were tied in 2020 because of the pandemic. Telecoms implemented a significant tariff hike in December 2019. This was followed by continuous conversion of 2G to 4G subscribers.

The rolled-out reasons for tariff hikes by the companies

  1. As per the industry experts, the sector is very capital intensive, with rapidly changing technological cycles that demand regular investments. It is thus essential that the industry stays functional to promote the goal of Digital India. As a result, the company raised its pricing in 2019. As per the Telecom giants, this level of ARPU will afford the significant expenditures necessary for networks and spectrum. More importantly, this would offer that particular brand more scope in scaling up 5G in India.

 

  1. According to industry experts, companies are planning to spend gradually on the network and regulatory Capex in FY23 and ARPU growth, and these tariff hikes might ease some burden on the finances of the company.

telecom tariff hike

The above looks to hint that the common man’s pocket is being victimized to give telecom behemoths a competitive advantage!! Do you believe this is justified? It is reasonable that hikes are necessary for the long-term growth of the entire industry and the benefit of society, but exploiting the common man as a tool to produce investments and support company finances is not a good substitute.

 

Claims by the industry gurus

  1. In 2019, as per the telecom industry body Cellular Operators Association of India, the hike in the cost of mobile calls and internet tariffs will benefit users, increases government revenue collection, and promotes employment generation by strengthening the sector’s financial health.
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  1. Customers would benefit from new prices because they will allow operators to make crucial improvements to the communication network, which has remained stagnant due to financial difficulties in the sector. The telecom sector should begin to witness improvements in customer experience and services, as inferred by COAI Director in 2019.

 

Is this action truly in the best interests of the common man, or is it a gimmick to fool the common man?

In the second half of India’s 75-year independence, the country’s major telecommunications authorities have proven that they have teeth and are determined to apply them.

telecom tariff hike

To make up for losses caused by a lengthy pricing battle, India’s debt-ridden telecom firms are constantly announcing tariff hikes. Since the 2008 2G scandal, the industry has been in trouble. On one hand, big players are gaining worldwide fame by qualifying as national billionaires; while on the other hand, those same big players are forcing the common man to pay scam penalties by imposing tariff hikes! Not only that, this government appears to be supporting this move, as it appears that these behemoths and the government have formed a cartel to torture the common man.

edited and proofread by nikita sharma

Priyanka Chakraborty

Author | Documenting thoughts to connect people | Drafting news to awake people | The voyage in the sphere of Content Creation

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