Phone bills could spike up by 25% after Lok Sabha elections

Mobile bills are expected to experience a 25% rise following the elections as the telecom companies are planning to implement a tariff hike for high fourth time in recent years. It is said that the Average Revenue Per User(ARPU) of the telecom providers will experience considerable growth after the hike in tariff.

After a heavy investment in the 5g network establishment, the companies are planning to improve their profit rates. “We expect a meaningful hike of around 25% by the operators in the near term on the back of a stable competitive environment, their need to improve profitability following heavy 5G investment, and continued government support,” a report by brokerage Axis Capital highlighted.

Despite the high, it is believed that the consumers in both the urban and rural households will be able to manage the higher cost as the urban households will have to spend 0.4% more than their average spent on telecom services they are currently spending 3.2% which will increase to 3.6% after the hike. On the other hand, the ruler subscriber will experience a 0.7% high in their total telecom spent from 5.2% to 5.9%.

The telecom companies will experience a growth of 16% in their ARPU following the rise. Axis Capital has predicted that Bharti Airtel will experience an estimated increase of Rs 29 crore and Rs 26 crore for Jio after the tariff adjustments.

It is speculated that the tariff high will not affect the loyalty of the users as the users will stick to their network provider unless they have any problem with the service and speed. The price rise will not impact the relationship between the provider and the consumer.

According to analyst’s predictions, Bharti Airtel and Jio will be the most benefiting parties from the tariff rise. They will further consolidate their market positions sidelining other providers.