Following the Lok Sabha elections, millions of mobile users might face a significant shock. According to reports, telecom companies are preparing to raise mobile tariffs by up to 25%. A brokerage firm, Axis Capital, has indicated that these companies have made substantial investments in 5G technology and are now seeking to boost their profits. This price hike is expected to impact both urban and rural areas.
The report suggests that both postpaid and prepaid plans are likely to become more expensive. Additionally, internet plans are also expected to see price increases. The main reason behind the hike in mobile recharge costs is the need to increase average revenue per user (ARPU). Currently, the ARPU for telecom companies is quite low, meaning they are not making enough profit per user to cover their expenses. This situation is prompting telecom companies to consider a 25% increase in their tariff plans.
How Much More Will You Pay?
The crucial question is how this 25% tariff increase will affect the average consumer’s expenses. For example, if you currently recharge your mobile for 200 rupees per month, you can expect an increase of 50 rupees, making the new cost 250 rupees. Similarly, a 500 rupee recharge will see a 125 rupee hike, and a 1000 rupee recharge will cost an additional 250 rupees, totaling 1250 rupees.
Base Price Increase
Media reports suggest that this tariff increase will also raise the base price set by telecom companies. Airtel’s base price is expected to go up by 29 rupees, while Jio’s base price might increase by 26 rupees. This hike could lead to a 10 to 15% increase in ARPU within the current calendar year. Notably, telecom companies have already tripled their tariffs between 2019 and 2023.
In summary, the anticipated tariff hike post-election is set to impact millions of mobile users, significantly increasing the cost of staying connected.
