'Indian telcos have enough headroom to increase tariffs'
telecom tariffs are amongst the lowest in the world as a percentage of per capita gross national income (GNIpc), and the country's telcos have enough headroom to raise prices by at least 1.5x over the next 4-5 years, industry executives and analysts said. GNIpc is the dollar-value of a country's final income in a year divided by its population.
Accordingly, the lower the tariff as a percentage of GNIpc, the more affordable the services in that country.
Among comparable nations with a GNIpc of less than $10,000, India's telecom tariffs are the second lowest at 1.11% of GNIpc after Brazil's 0.92%, as per macro data collated by the International Telecommunication Union (ITU) and the World Bank. Telecom tariffs are much higher in South Africa (3.49% of GNIpc), Thailand (2.92%), the Philippines (2.32%), Indonesia (1.71%), Egypt (1.6%), and Bangladesh (1.4%), data showed.
There is a case for sharp tariff hikes by telcos such as Reliance Jio, Bharti Airtel and Vodafone Idea (Vi) in calendar 2024 as both Jio and Airtel are slated to complete pan-India rollouts of their 5G services shortly, analysts said.
Vi's 5G rollout start, though, is pending as the telco is yet to close its much-delayed fundraise. The last significant sectoral tariff hike had happened in November 2021 when Jio, Airtel and Vi had increased rates by 19-25%, they pointed out.
«Indian telecom tariffs are the most affordable in the world as per ITU database, which gives us the comfort that the country's telecom services providers can increase rates by at least 1.5x over the next 4-5 years even as minimum data requirements grow, and still maintain the status of being the most affordable,» ICICI Securities said in a research note analysing ITU and World Bank
