Airtel preparing for tariff hike post elections, Jio to focus on greater data usage: Report

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Telecom tariff hike of 20% likely in 2024, post elections, says BofA Securities; Airtel shares zoom Executives noted that due to increased data consumption in 5G packs, users are upgrading to higher plans for an enhanced viewing experience. They also highlighted Jio's efforts to boost the adoption of its JioFiber broadband plans by bundling them with various services. With no complimentary offerings in these packs, user recognition of their value is heightened.

“With users moving to higher 5G packs, higher realisation from Fiber plans, and some churn from other operators, we expect Arpu to rise without going for a headline tariff hike," executives were quoted as saying by The Financial Express. Analyst projections indicate that Jio is experiencing the most rapid growth in the home broadband sector, boasting a year-on-year increase of 37.6%. On the other hand, analysts note that Airtel has taken proactive measures by adjusting tariffs across multiple plans to push its Average Revenue Per User (ARPU) beyond ₹200 per month.

However, to continue increasing its ARPU, Airtel may need to resort to raising headline tariffs. Presently, Airtel leads the industry with an ARPU of ₹208, surpassing Jio’s ₹182 and Vodafone Idea’s ₹145. Brokerages have factored in tariff increases by operators following the elections, with many believing that Bharti will spearhead this initiative.

“We expect tariff hikes to be announced post elections (July to October time frame). We expect a strong 15% tariff hike. The tariff hike will be led by Bharti and that will see Arpu stabilising to ₹260+ levels by FY26," Bernstein said in a recent report.