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Jio, Airtel, and Vi likely to Increase Tariffs ahead of 5G Rollout (See Details)

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New Delhi :

India’s 5G spectrum auction ended with Jio buying 24,740MHz spectrum at Rs 88.078 crore, Airtel purchasing 19867.

8MHz spectrum at Rs 43.084 crore, Vodafone Idea (Vi), acquiring 3300MHz mid-band 5G spectrum, and 26GHz in mmWave spectrum.

These three telecom companies will likely start 5G connectivity in India in October.

Akash Ambani, Jio chairman, has hinted at 5G connectivity being rolled out across the country in August.

Experts believe that Indian telecom companies could raise tariffs to offset recent spending as they prepare to roll out 5G services.

The Spectrum Usage Fee (SUC), which is charged by the Department of Telecom (DoT), has been abolished by the department.

The three percent floor rate has been abolished by the department.

Nomura Research believes that tariffs will rise by just four percent for three telecom companies as a result of these changes.

Nomura Research’s report stated that, “With large SUC savings,” the net annual spectrum outlay would be INR75bn.

It would also require a modest 4% tariff increase (on overall subs) or a 30% premium 5G (vs a popular 84-day, 1.5GB/d 4G plan).

According to the research organization, Jio users will likely face a higher tariff increase than Airtel users.

Nomura researchers stated that Jio and Airtel would charge premium pricing for 5G plans.

The report stated that R-Jio has the highest outlay and the quantum of incremental tariff increases / 5G Premium is significantly higher than Bharti/Vi.

This should improve the outlook for future tariff hikes/ telcos’ ability charge premium pricing for 5G (vs. 4G).

ICICI Securities believes that telecom companies will increase their tariffs as high as 15% to offset recent spending. Telecom Talk reported.

ET Telecom reported DoT expects telecom firms to submit Rs 13,500 within the next 10 days.

This is part of the first installment with Jio paying approximately Rs 7,838 crore, Airtel around Rs 3,834 cr, Vi coughing about Rs 1,673 crore,

Adani Data Networks around Rs 212 crore, and Airtel around Rs 3,834 cr.

This isn’t the first time we hear about Indian telecom companies raising tariffs.

Telecommunication companies are hinting at a second round of tariff increases happening in the coming year.

“It is possible that there could have been another price increase in 2022.

While announcing the third quarter revenue for the financial year 2022, Vodafone Idea CEO Ravinder Takkar said that a price increase would occur at some point.

BhartiAirtel CEO for India and South Asia Gopal Vital also had similar thoughts.

He had stated earlier this year that he expected a tariff increase sometime in 2022.

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