India’s billion mobile subscribers could face a 30% price hike in 2020

Analysts predict that consumers could face steep price rises in 2020 as the country’s mobile network operators battle against incredibly challenging market conditions, spiralling levels of debt and the brutal capital investment demands of 5G
Finance, Telecoms, India, Bharti Airtel, Vodafone Idea, Reliance Jio

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Mobile phone subscribers in India could face a 30 per cent price hike in 2020, as the country’s telecoms operators continue to battle against challenging market conditions.

Average revenue per user (ARPU) remains extremely low in India, with some operators confirming that they are existing on ARPUs of just $1.50.

A report in the Economic Times of India suggested that telcos could be preparing to raise prices in order to try and boost revenues across the board.

“With ARPUs still well below the Rs180-200 ($250-$2.80) pre-Jio levels and a reduction in overall telecom-related consumer spending (as a percentage of GDP) over the past three years, there’s adequate scope for telcos to raise tariffs by another 30 per cent later this year,” Sanjiv Bhasin, director at IIFL Securities, told the Economic Times.

In late 2018, Bharti Airtel, Vodafone Idea and Reliance Jio all announced that they would unilaterally kill off their lowest priced tariffs and upgrade their customers to more expensive plans.

"Our new mobile plans offer tremendous value to our customers and are backed by a superior network experience on Airtel's nationwide 4G network," Shashwat Sharma, chief marketing officer, Bharti Airtel, said at the time.

Indian telcos are still reeling from a Supreme Court ruling over the way they calculate their adjusted gross revenues (AGR), which left them saddled with a combined $13 billion of debt. So far, the Indian government has resisted telcos’ calls to deliver a relief package, with the Department of Telecoms insisting that all dues must be settled by the end of January.  

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