After Jio’s Tariff Hike, Airtel’s Tariff Hike is here! Details

Jio’s tariff hike is here and it seems like Airtel didn't spend any longer in coming up with a tariff hike soon after Jio. This seems to be in alignment with the below statements in the recent Airtel Earnings Call for the quarter ending March 2024.

“ I think the return that the industry really needs is predicated on tariff repair and this is really the heart of the problem that we have today with our pricing and tariffs are at an absurdly low level relative to any other part of the world so tariff repair is solely needed for return ratios to improve,” says Gopal Vittal Managing Director & Chief Executive Officer of Bharti Airtel.

In another statement in the same call, Mr. Gopal also says “If competition does not follow then it will hurt us and that is a challenge so we just have to wait and see when the time is right.”

Now that Jio has increased its tariff prices in India by 20%, the time does seem “right” for other telcos to jump in on the tariff hike bandwagon. 

In this article, we are going to be sharing the complete details of Jio’s Tariff Hike in 2024, new plan prices as well as what’s Airtel’s stance on tariff hikes and the newly hiked plans of Airtel. 

Reliance Jio Infocomm on 27th June 2024 announced Jio’s plans price hike. Interestingly, the telco termed the hiked plan prices as “new plans” being launched. Users starting from 3rd July 2024 will get to see the newly hiked prices of Jio’s recharge plans starting from as low as Rs.15 (now ₹19) to the yearly plan of Rs.2999 (now ₹3599).

Below is a detailed chart of the Jio recharge plan’s hiked prices:

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These new Jio hiked plans prices will be effective from July 3rd onwards. Commenting on the Jio’s Tariff Hike, the company wrote

“Jio cares & reaffirms customer-first commitment through new plans - New plans to be available from 3rd July 2024. JioBharat/JioPhone value proposition remains unchanged and industry-best.”

This means as per the new Jio recharge plans hike, your JioBharat/JioPhone plans will still remain at the same price as previously.

Some users had this expectation that Jio would start charging extra for its unlimited 5G offer after its tariff hike. However, to a bitter-sweet surprise, Jio will still continue to offer unlimited 5G data on its data recharge plans but now only applicable on plans with 2GB per day data benefits.

After Jio increased its tariff prices, Airtel was highly expected to follow Jio’s footsteps and introduce a tariff hike for its subscribers.

Airtel on 28th June, announced a price hike for Airtel recharge plans starting 3rd July.  

Airtel wrote, "In this light, we welcome the announcements in the industry to repair tariffs. Airtel will also revise its mobile tariffs as indicated below, from July 3rd. We have ensured that there is a very modest price increase (less than 70p per day) on the entry level plans, in order to eliminate any burden on budget challenged consumers."

The detailed Airtel hiked plans prices can be viewed here:

Airtel hiked plans prices ✔️

In its latest Earnings Call for the quarter ending March 2024, Mr. Gopal, the MD of Bharti Airtel said,

“We have stopped investing on any capacity investments on 4G and therefore I think the return that the industry really needs is predicated on tariff repair and this is really the heart of the problem that we have today with our pricing and tariffs are at an absurdly low-level relative to any other part of the world so tariff repair is solely needed for return ratios to improve.”

Earlier, Mr Gopal also said,

“My own sense is that you will need substantial repair in the industry. We are already at just over Rs. 200 ARPU. I think the right level of ARPU even at Rs. 300 would still be one of the lowest in the world so there is a substantial repair to be had in the industry”

If you are taken aback by Airtel’s comment that “tariffs are at an absurdly low level in India,” don’t worry, you aren’t the only one. But is there any truth in this statement? Are telecom tariffs really at an absurdly low level in India?

Let’s talk about some data. Here’s a tariff rate of 1GB of data in India vs some other countries:

Source: Tariff & Population Data from the year 2022 report of Statista

We can see India is one of the countries with the lowest tariff rates but are these “absurdly low” as the comment of Mr. Gopal says?

In a country with over 141 crore people and a much lower average income compared to developed countries, even low telecom tariffs can still be a big expense for many. Comparing India’s tariffs to places like the US or France doesn’t make sense because it ignores key factors like:

• Market Competition

• Income Levels

• Economies of Scale

• Service Quality and Coverage

• Spectrum Costs

• Government Regulationsd

These factors play a huge role in determining what tariffs should be. So, saying India’s tariffs are "absurdly low" without considering these factors is misleading.

Also, not to forget India's large population provides a huge market potential, allowing telecom companies to maintain low tariffs while still capturing significant revenue.

Saying a tariff rate is absurdly low in a country like India is pretty subjective (and a bit out of touch with the core reality)

But, these are just the views of the author. Do share with us in the comments below if do you think tariff rates in India are absurdly low as Mr Gopal, the MD & CEO of Bharti Airtel says?

Also, just an interesting fact:

Jio’s ARPU (Average Revenue Per User) stands at ₹178.8 for FY 2022 - 2023 while Airtel’s ARPU stands at ₹209 IN Q4’24 vs ₹193 in Q4’23 so Airtel is still kind of ahead of its biggest competitor but still thinks even an ARPU of ₹300 would be the lowest in the world?

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List of sources used in this article:

Jio Infocomm Press Release on Jio’s Tariff Hike

Reliance Industries Annual Report for Year 2022 - 2023

Bharti Airtel Earnings Call for Q4, 2024 

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Thanks to @Uhtnas4444 for also sharing this news with us here: Jio Tariffs increased (Effective 3rd July)

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