Mobile and Internet users enjoying very cheap plans since the arrival of Reliance Jio in the telecom industry will now have to loosen their pockets a little more. When Jio started the process of increasing the price by charging other companies on outgoing calls, Behar Airtel and Vodafone Idea from Price War considered it an opportunity and announced a hike in tariff from December. After this announcement, Jio said that he will again make his plan expensive, but slowly.
- Telecom companies moving to recover losses due to price war erupted due to the arrival of Reliance Jio
- Airtel and Vodafone Idea have room to increase tariffs up to 30%
- Reliance Jio starts charging 15% on calls to other companies
- On Wednesday, the government announced a two-year exemption on spectrum payments to Industry.
If Reliance Jio hikes tariffs over the next few weeks to compensate for losses , Bharti Airtel and Vodafone Idea will also have room to increase up to 30%. Analysts say these two companies could implement this increase in the next three months. He believes that if this happens, the companies will suffer the loss of price war in the telecom sector.
‘scope to increase up to 30%’
Credit Suisse said in a note, “With Jio’s potential 15% increase and 15% increase for calls to other networks, there is scope for an average 30% increase in tariffs for Airtel and Vodafone Idea.” However, analysts say that Mukesh Ambani’s Jio will be very cautious about the second round of growth as it is aware that since it started charging outgoing calls on other companies, the price gap between the old telecom companies and it Less has been reduced.
Jio will also increased tariff
Three years ago Reliance Jio, which came up with a surprisingly cheap plan, said on Tuesday that it is willing to increase tariffs on the instructions of regulator TRAI in a way that does not affect the consumption and digitization process of internet data. On Monday, Vodafone and Airtel announced to increase the tariff from next month.
Will my life be returned to the industry?
“It will be important to look at TRAI’s consultation paper after talks with Jio on pricing,” Geoffridge said in a report. The report said that the plan to increase the tariff of the three telecom companies can be beneficial for the financial health of the sector only if the growth is at least 20% and the companies get some relief from the government too. .
On the price recovery from the price war,
City Research said that Jio’s move will prove to be a turning point in terms of the sector’s economic strength. It said that the move by Jio would begin to make up for the loss caused to the sector due to the price war. City Research has also acknowledged that the extent to which the losses will be recovered will depend on the scope of the increase and the government relief.
ARPU estimated to grow by 55%
Credit Suisse estimates that the average revenue per user (ARPU) of Airtel and Voda Idea will grow 55% by 2022 to Rs 198 and Rs 166 respectively. This market research company says that the government is eyeing to improve the financial health of the telecom sector and Jio also seems willing to participate in this effort. Airtel and Vodafone Idea had announced ARPU of Rs 128 and Rs 107 respectively in the September quarter.
7 lakh crore debt on telecom industry
Morgan Stanley believes that Jio has also decided to increased tariff when Airtel and Vodafone said that the telecom industry will improve faster than expected. Older telecom companies have been consistently saying that there is a dire need to cut high tariffs and demand for taxes and other items from the government to revive the industry that is under debt of Rs 7 lakh crore.
The government gave a good news
on Wednesday, however, the industry has received a good news from the government on Wednesday evening. In a meeting of the Cabinet Committee on Economic Affairs, it was decided to give two years exemption on spectrum payments to telecom companies. Bharti Airtel, Vodafone Idea and Reliance Jio will get a relief of Rs 42 thousand crore due to the postponement of spectrum payments for the financial years 2020-21 and 2021-22. However, Telecom Minister Ravi Shankar Prasad made it clear in the Lok Sabha on Wednesday that no immediate relief is being considered on the liability of Airtel and Vodafone Idea.
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