Phone bills to surge up to 25% after polls!!! This is why
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New Delhi: It is reported that there will be an increase in mobile phone calls and data charges after the Lok Sabha elections. Reports that telecom companies are preparing for the fourth-phase tariff hike. Economic Times reports that call and data rates are expected to increase by around 25 per cent.
According to a report by brokerage firm Axis Capital, there is a need to increase the tariff by around 25 per cent to maintain a stable and competitive environment in the telecom sector, improve profitability in line with the huge investment in the 5G sector and for further backing from the government.
The move by telecom companies is to increase the average revenue per customer (ARPU). However, it is pointed out that the tariff increase will not be a huge burden on the consumers. Urban households currently spend 3.2 per cent of their total expenditure on telecom facilities. It is estimated that the increase in tariff will only go up to a rate of 3.6 per cent. In rural areas, it will go up from 5.2 per cent to 5.9 per cent. A 25 per cent rate hike would result in a 16 per cent increase in ARPU. Airtel is to get an average of Rs 29 more per customer while Jio Rs 26.
ARPU for Jio currently stands at Rs 181.7 in the first quarter of 2024. In the October-December quarter, AR{U stood at Rs 208 for Airtel and Rs 145 for Vi.
Experts in the sector point out that telecom companies are expected to increase bundle plans by Rs 100 by the end of this calendar year. Subscribers will be attracted to higher-value plans by ditching low-value plans. It has also been pointed out that this will increase the average revenue per customer by Rs 120 to Rs 200.