As per a recent report in the Economic Times, Airtel and Reliance Jio are reportedly contemplating a 5-10% hike in the prices of their forthcoming 5G services in comparison to their existing 4G offerings. This strategic move is believed to be part of a broader effort to capture a larger market share, particularly at the expense of Vodafone Idea, which is grappling with financial challenges. The days of enjoying complimentary 5G data at the cost of 4G rates may soon be drawing to a close. Analysts are forecasting that from the latter half of 2024 onward, both Airtel and Reliance Jio are likely to introduce charges for their 5G services.
According to the report, the telecom giants are anticipated to discontinue unlimited 5G data plans for premium customers and replace them with 5G-specific plans that come with a higher price tag compared to their 4G counterparts. This strategic shift is geared towards driving monetization and bolstering overall revenue growth. Industry experts further predict that, in the September quarter of 2024, Airtel and Reliance Jio may implement an increase of at least 20% in mobile tariffs. This adjustment is seen as a measure to enhance their return on capital employed (RoCE), given the substantial investments made in 5G infrastructure and the associated costs of acquiring new customers.
It’s noteworthy that Vodafone-Idea and BSNL, other key players in the Indian telecom market, have not yet introduced their 5G services. A research note from Jefferies, a prominent research firm, suggests that with a focus on monetization and as they near completion of their 5G coverage, Jio and Airtel may discontinue offering unlimited 5G data to their higher-ARPU (average revenue per user) data customers. Instead, they might unveil 5G-specific plans during the latter part of 2024. The impending developments indicate a significant shift in the dynamics of the Indian telecom sector as major players adapt their strategies in the wake of advancing technology and evolving market conditions.