Telcos to hike tariffs by up to 20%

The telecom service providers, across the board, will be hiking the subscriber tariffs by about 20%, on an incremental basis, in the month of December.

After years of slashing the prices of the plans, after the advent of a bitter tariff war since the billionaire Mukesh Ambani-controlled Jio started its operations, this is the first time that telcos are going for the price hike.

Multiple sources across different telcos confirmed to DH that the price hike is likely to be near 20%. "We are planning to increase tariffs by 20%," said multiple sources.

The sources also suggested that these tariff hikes are more likely to hit the pre-paid subscribers than the post-paid ones. As of date, both Reliance Jio and Airtel have most of the users in the pre-paid plans.

RJio's subscriber plans start from Rs 98 and go as high as Rs 9,999 for the long term pre-paid plans. Airtel's, on the other hand, has a pre-paid pack starting Rs 35 and go as up to as high as Rs 1,699 for the long term pack.

The telcos are expecting that the move to hit its bottom rung customers if the price hike is uniform, owing to the elasticity of demand. "In case the price hike is uniform, it will hit the lower rung customers more -- most of whom are centered towards the rural areas," sources told DH.

The total wireless subscribers increased to 1,173.75 million from 1,171 million at the end of August. In fact, wireless subscription in rural areas increased to 514.56 million from 508.25 million.

As a result of this, the telcos are planning to hike the prices on an incremental basis -- lower hikes for lower plans and higher hikes for plans. "It will help us suffice as the margin in the higher plans would be larger," an industry source told DH.

Earlier this week, all the three telcos -- Airtel, RJio, and Vodafone-Idea -- announced their intention to hike the tariffs by December.

Earlier, RJio, which was providing free voice calls, announced its decision to charge a fee on the non-Jio outgoing calls.