End Of Price Wars? Telcos To Raise Tariffs As Mobile Broadband Subscriber Penetration Increases To 65 Per Cent

With mobile broadband subscriber penetration set to reach 65 per cent, telecom operators in India are likely to end the price war and increase the tariffs, Telecom Talk has reported.

Reliance Jio’s entry into the market is one of the primary reasons for the increase in mobile broadband users. The Mukesh Ambani-owned telecom company became a significant player in the market and reached 300 million subscribers in the last quarter of Financial Year 2019.

However, a new report revealed that Reliance Jio might need Rs 9,000 crore to keep alive the Special Purpose Vehicle (SPV), which was created to hold the demerged tower and fibre assets. Further, rival telcos Bharti Airtel and Vodafone-Idea Limited (VIL) also have plans to raise significant funds to ensure their capital expenditure remains high.

According to a JP Morgan report, Reliance Jio may consider increasing tariffs as both Airtel and VIL already announcing their plans to raise funds worth Rs 25,000 crores through private equity and bid for expanded 4G reach and robust network.

The need of Rs 9,000 crore to meet expenses combined with the factor of tipping point penetration might push Jio to increase tariff rates. Furthermore, other telcos have already shifted their focus in growing profits and dumping non-paying subscribers, which could soon force an increase in tariff by Jio.