India’s telecom service providers have made huge waves in India by raising tariffs with a plan to capitalize on investment and gain additional profits as they invest heavily in 4G and 5G services.
In 48 hours, leading private companies like Reliance Jio, Bharti Airtel and Vodafone Idea have hiked their tariffs by 10 to 25 percent. Through this, 5G service, 4G service customers can get additional income.
The main target of this tariff increase is 5G service customers. However, the rate hike will reduce the number of new customers switching to 5G service and Future Phone customers switching to smartphones. Market experts say that the telecom companies have kept their own castle witch with this tariff hike.
It is estimated that the 3 telecom service providers will be able to earn around Rs 47,500 crore per annum with these tariff hikes made in the last two days. In particular, there is additional revenue (additional cost to people) from mobile customers using 5G services.
With this rate hike, telecom companies are likely to increase the number of 4G users rather than the much-anticipated 5G customers. Because, this tariff hike affects 4G plans less. Thus, their transition to 5G smartphones may be delayed.
Before the corona pandemic, 50 lakh Future Phone customers were switching to smartphones every month. But now this number has reduced to 30 to 35 lakhs. By 2024, this number may further decrease to 31 lakh, according to Tarun Pathak, director of research at Counterpoint Research.
It is noteworthy that Reliance Jio, Bharti Airtel and Vodafone Idea, all three leading private companies have targeted to convert Future Phone users to 4G service and smartphone customers by offering affordable smartphones and discounts in alliances.
This tariff hike has prevented this segment of people from switching to 4G or 5G in bulk. By this Jio, Airtel, Vi will lose huge customer base and revenue.
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