The three major telecom operators, Reliance Jio, Bharti Airtel and Vodafone Idea, will raise tariffs in the range of 20-41 percent for prepaid customers.
Bharti Airtel and Vodafone Idea will raise tariffs from December 3 while Reliance Industries-owned Reliance Jio will increase charges from December 6.
That is also the date when
Jio, India’s biggest telecom player, will launch its All-In-One plans with unlimited voice and data. The company said that the new plans will be 40 percent more expensive but will bring users 300 percent more benefits.
“These plans will have a fair usage policy for calls to other mobile networks. Although the new All-In-One plans will be priced up to 40 percent higher, staying true to its promise of being Customer-First, Jio customers will get up to 300 percent more benefits,” the company said in a statement.
How does Jio’s tariffs stack up against those of its competitors?
Bharti Airtel and Vodafone Idea announced new prepaid plans starting with options of 2 days, 28 days, 84 days and 365 days validity. The tariffs of these plans range from Rs 19 to Rs 2,399.
Reliance Jio is yet to announce the breakup of new plans.
Bharti Airtel’s new plans in the "unlimited" category are costlier by up to 41.2 percent. The highest rate of increase of 41.2 percent is in its annual unlimited category plan of Rs 2,399 as against Rs 1,699 at present.
Vodafone Idea revised rates of its unlimited mobile and data services plans and also introduced some new plans with validity periods of 2 days, 28 days, 84 days and 365 days.
Even though the company classifies a set of plans in the 'unlimited' category, these actually come with usage limits for data at a promised speed and 100 SMS per day limit.
Further, it will charge 6 paise per minute for every outgoing call made by customers to the network of other operators. Remember, the company had made a hue and cry over Jio’s 6 p increase but is now doing the same.
With the increase in tariffs, analysts believe that Reliance Jio will still be the cheapest for customers. An independent analysis shows that Jio prices were 20 percent cheaper than those offered by its competitors before the tariff hike takes effect. After the hikes by all three telecom players, Jio will still be cheaper by more than 25 percent than the other two, according to most analysts.Credit Suisse expects Jio plans to be cheaper by up to 20 percent while Bank of America-Merrill Lynch said in a note that Jio plans are likely to be cheaper by at least 15 percent.Kotak Institutional Equities expects Vodafone Idea and Bharti Airtel’s tariff hikes to yield a Rs 25-30 increase in blended Average Revenue Per User (ARPUs).
It said that Vodafone Idea can see an EBITDA uptick of Rs 8,000-9,500 crore and Bharti Airtel by Rs 7,000-8,500 crore.
Bank of America Merrill Lynch (BofAML) remained bullish with ‘Buy’ rating on Reliance Industries and Bharti Airtel and expects more tariffs hikes to follow. The research house considers Bharti Airtel and RIL as better names that benefit from tariff hikes.
Disclosure: Reliance Industries, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com