Telecom firms are reportedly preparing for a fourth round of tariff hikes, which could result in higher mobile phone recharge costs post-Lok Sabha elections. A report by brokerage firm Axis Capital suggests a possible 25% increase in tariffs due to the competitive environment, the need to enhance profitability after heavy 5G investments, and ongoing government support. This anticipated hike may affect both urban and rural users, with urban customers potentially experiencing an increase in telecom expenditure from 3.2% to 3.6% and rural customers facing a potential rise from 5.2% to 5.9%. The report estimates that the projected 25% hike in headline rates could correspond to a 16% growth in the average revenue per user (ARPU). This comes as Reliance Jio reported an ARPU of ₹ 181.7 for the quarter ending March, while Bharti Airtel and Vodafone Idea’s March quarter numbers are yet to be disclosed. However, their figures for the October-December 2023 period stood at ₹ 208 and ₹ 145, respectively. Jio’s total assets at the end of Q4 FY24 amounted to ₹ 4,87,405 crore, with net profit from January to March rising to ₹ 5,337 crore from ₹ 4,716 crore a year ago. On the other hand, Bharti Airtel’s consolidated Q4 revenue reached ₹ 37,599 crore, while its net profit witnessed a 31.1% decline compared to the previous year.
Brace for Higher Mobile Recharge Costs Post-Lok Sabha Elections
