After the Reliance Industries company Jio enters the telecom industry, customers enjoying cheap mobile plans may now have to loose their pockets more. Reliance Jio has recently imposed an IUC charge of six paise per minute for making outgoing calls on other companies' networks.
After this, Behala Airtel and Vodafone-Idea took it as a golden opportunity from the price war. Now from December, these companies have also announced to increase the tariff. After this, Reliance Jio has said that if it is needed, it will gradually make its plan expensive again.
Will loss be compensated?
If Reliance Jio increases its mobile tariff in the coming time, then Bharti Airtel and Vodafone-Idea can also have a possibility to increase the tariff by up to 30%.
Telecom analysts say that both telecom companies can increase tariffs in the next three months. Analysts believe that if this happens, the companies that have suffered losses due to price war in the telecom sector may get a chance to recover some.
Tariff increase by 30%?
Credit Suisse said in a note, "With Reliance Jio's potential 15% increase in tariffs and 15% increase in calls to other networks, there is an average 30% increase in tariffs for Airtel and Vodafone-Idea. "
Analysts say that Mukesh Ambani's Reliance Jio may be very cautious about the second round of tariff hike as it is aware that ever since it started charging IUC for outgoing calls on other companies, the old telecom companies and its The middle price gap has reduced to a very low level.
Jio will also increase the rate
Three years ago Reliance Jio, which entered the telecom business with a very cheap plan, has said that it is ready to increase the tariff on the instructions of TRAI in a way that does not affect the consumption and digitization process of internet data. Vodafone and Airtel had announced to increase the tariff from early next week itself.
"It is important to look at TRAI's consultation paper after talks with Jio on the issue of pricing," Geoffridge said in a report. The report said that the plan to increase the tariff of the three telecom companies can be beneficial for the financial health of the industry only when this growth is at least 20%. Along with this, companies should also get some relief from the central government.
City Research said that Reliance Jio's move could prove to be a turning point in terms of the economic strength of the sector. It said that this move by Reliance Jio could start to compensate the loss caused to the telecom sector due to price-wise. City Research has also considered that how much damage will be compensated, it will depend on the scope of increase and government relief.
Credit Suisse estimates that the average revenue per user of Airtel and Vodafone-Idea will increase by 55% to Rs 198 and Rs 166 by 2022. The company says that the central government is eyeing to improve the financial health of the telecom sector and Reliance Jio is also ready to participate in this effort.
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