With effect from July 3, Airtel announces a mild tariff hike in response to Jio’s increase.

The second-biggest telecom provider in India, Bharti Airtel, has announced that it will be raising its mobile rates as of July 3. This comes after rival Reliance Jio made a similar announcement. Entry-level plans will experience a daily increase of less than 70 paise due to the change, which will result in a “very modest” pricing hike. For different plans, this means a price increase of between 10 and 21%.

Airtel stressed in a regulatory filing that the price rise was moderate in order to lessen the impact on clients who are on a tight budget. Regarding unlimited voice plans, the rates will increase specifically from Rs 179 to Rs 199, from Rs 455 to Rs 509, and from Rs 1,799 to Rs 1,999. Plans for daily data will also alter; the Rs 479 plan will now cost Rs 579, an increase of 20.8%.

The market leader, Reliance Jio, increased rates by 12–25% for all cell plans, postpaid and prepaid, just before Airtel made its decision. Jio’s action, which aims to increase its Average Revenue Per User (ARPU), comes after three quarters of stagnating ARPU at Rs 181.7 until March 2024. Furthermore, Jio has restricted the amount of time that its users can use limitless free 5G services.

In India’s telecom industry, Bharti Airtel has always insisted that an ARPU of more than Rs 300 is necessary for a financially viable business strategy. The business contends that in order to deliver a respectable return on capital and to finance significant expenditures in spectrum and network technology, this amount of income is required.

Following the conclusion of the most recent telecom spectrum auction on June 27, the two telecom behemoths increased their tariffs. Bharti Airtel placed first in this auction and won 97 MHz of spectrum for a total of Rs 6,856 crore. Reliance Jio paid Rs 973 crore for 14.4 MHz, and Vodafone Idea paid Rs 3,510 crore for 50 MHz.

India has historically had some of the lowest telecom ARPUs in the world, which makes it difficult for telecom operators to upgrade and maintain their networks. This issue should be resolved by the recent tariff modifications, which will provide the funding required for current and next technical developments.

In conclusion, Bharti Airtel has raised rates, which will take effect on July 3. The company has justified this action as a necessary measure to maintain its financial stability and to encourage more investment in the telecom industry, as it did with Reliance Jio.