RJio confident of organic Arpu growth, sees no immediate need for tariff hike

Subscribe to enjoy similar stories. As India’s telecom firms weigh the timing and need for tariff hikes, Reliance Jio Infocomm, India’s largest operator by market share, has ruled out any immediate increase, signalling confidence in organic growth in its average revenue per user (Arpu), driven by rising 5G usage. This contrasts with the stance of rival operators Bharti Airtel and Vodafone Idea that have repeatedly flagged the need for tariff correction to improve their returns on capital deployed.

Airtel, in particular, has been arguing that India’s telecom tariffs remain among the lowest globally and that there is scope for higher Arpu also through a differentiated pricing structure compared to a “one-size-fits-all" pricing model. “We are quite happy with the traction—1% (quarterly) increase in Arpu. Over the last year, it has gone up by almost 5-5.5%.

We have certain handles to improve the Arpu while contributing giving more value to the customers and that's what we will continue to focus on," said Anshuman Thakur, head of strategy at Reliance Jio, during an earnings call with analysts on Friday. “Organically if we can improve our Arpu by 5-6% a year. I think that's a good number, a good place to be in while adding many more customers," Thakur said, adding that the telecom operator is seeing a lot of uptake in 5G data consumption on its network.

In the December quarter, Jio’s monthly Arpu rose 110 basis points, or 1.1% sequentially, to ₹213.7 from ₹211.4 at the end of September. In the absence of tariff hikes, the growth in the operator’s Arpu has been rising about 1% sequentially over the last one year, which in a way has restricted the growth of the operators, given there are promotional 5G offers. In terms of Arpu,