Recharge Price Hike: India’s big telecom companies have increased the trouble of people by increasing their prepaid and postpaid plans one after the other. First Reliance Jio, then Airtel and then VI have announced an increase in tariff plans. The increased prices of Reliance Jio and Airtel have come into effect from today, 3 July.
At the same time, the prices of Vodafone Idea (VI) will be applicable from tomorrow i.e. July 4. In such a situation, many people are not able to understand why the telecom companies have increased the prices of their plans simultaneously and what could be the reason behind this.
If we talk about the increased prices, Reliance Jio has increased its tariff by 12 to 25 percent. At the same time, Airtel has increased the prices of plans by 11 to 21 percent, while VI has increased its tariff by 10 to 21 percent.
The reason behind the increased prices
The SIM cards of these three companies are used by crores of users in the country. The increase in recharge prices will affect the pockets of crores of people. Telecom companies have given many reasons behind the price hike. For example, Airtel said that high tariff will improve both quality and coverage, while Jio’s entire focus is to increase the average revenue per user (ARPU). Apart from this, it has to start monetizing its 5G services.
This means that the free unlimited 5G service that Jio and Airtel users have been getting for the past several months will also stop after a few days and then users will have to buy a 5G tariff plan to use the 5G service. The companies also say that whatever profit is made by increasing the tariff will be used in 5G technology.
What is ARPU?
All three companies have cited ARPU as the main reason behind increasing the prices of the plans. ARPU is a key metric used to calculate the total revenue of a telecom operator divided by the number of its total users or subscribers. To sustain it financially, the mobile ARPU should be more than Rs 300.
If we look at the ARPU of the three companies till March 2023, Airtel’s ARPU was Rs 209, Jio’s ARPU was Rs 181.70 and Vodafone Idea’s ARPU was Rs 146. The tariff hike is expected to increase ARPU by 15 percent to Rs 220 in FY 2025, whereas it was only Rs 191 in the previous financial year.