Phone Bills Could Get 25% More Expensive After Elections: Here's Why

Mobile phone bills in India are likely to increase by about 25% after the general election, as telecom companies gear up for their fourth round of tariff hikes in recent years.

What Happened: This increase aims to boost their average revenue per user (ARPU) as a response to substantial investments in 5G technology and to sustain a stable competitive market, according to a report by brokerage firm Axis Capital.

Despite the significant hike, the report anticipates that both urban and rural customers will manage the increase. Urban households will see their telecom expenses rise from 3.2% to 3.6% of their total expenditure, while rural spending will climb from 5.2% to 5.9%. Consequently, telecom operators expect a 16% rise in ARPU, with an estimated increase of ₹29 for Bharti Airtel and ₹26 for Jio.

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The phasing out of certain low-value packs and a shift to bundled plans have already increased ARPU from around ₹120 and ₹200 to higher levels. Continuing to eliminate base plans is expected to further boost ARPU.

Industry analysts see Bharti Airtel and Jio as the primary beneficiaries of this upcoming price hike. Both companies have significantly increased their ARPU over the past four years, following three previous tariff increases. Meanwhile, Vodafone Idea (Vi) has seen a 33% ARPU increase during the same period but faced a 7% decline in overall wireless revenue due to continuous subscriber losses.

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