Why Telecom Companies Increase Prices. Telecom Services and Mobile Phone prices can once again rise due to the high inflation. In fact, due to the high rise tariff charges a few months ago, the total subscriber base of three private-sector telcos has come down to 37 million, however, their active subscriber base has improved by 3% and resulted in 29 million. In such circumstances, Companies are thinking of another increase in Tariff charges.
As per some reports by CRISIL, Between the span of August 2021 and February 2022 a sharp decline in the subscriber base of Reliance Jio was noticeable. On the other side, the active subscriber base of the company grew by 94% in the mid of March 2022. Where a year ago or so the company had an active subscriber base of only 78%. Bharti Airtel’s active subscribers also grew by 11 million to 99% in mid-March. However, the idea’s active subscribers have slowed down by 30 million.
Telecom Companies Increase Prices Due To:
Earnings of companies have been estimated to grow by 20-25%. In 2020-21, the average income per user of telecom companies has improved by 11% to Rs 149. The reason was that in 2019 December these companies had increased their Tariff charges. However, their ARPU decreased in 2020-21.
These companies must have a 15-20% Average Income per user expansion in 2022-23. This can take place with the help of full-time Benefits obtained by the Tariff hike in the last Financial year and likely the tariff rise in the current financial year. As a result of the pricing hike, the three telecom providers are likely to see a 20-25 percent increase in revenue.
According to one analyst, the hikes in prices can not take place in immediate terms because the consequences of the last round of hiked tariffs are yet to be fully reflected. But after a few months, after the spectrum auction; telecom operators might look at raising prices as they require to increase their profit.
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