To improve ARPU, telcos to hike tariffs more frequently in FY23: Report

Reliance Jio is most likely to lead the hikes as it is now focussing on profitability and aims to launch an IPO in next couple of years

The telecom sector in India is expected to see more tariff hikes in the coming quarters. The upcoming quarter, starting January, may see at least one rate hike, a report in Economic Times (ET) said. 

The report quoted an expert as saying that the tariff hikes will raise average revenue per user (ARPU). Reliance Jio is most likely to lead the hikes as it is now focussing on profitability. In the next couple of years, the company is aiming to launch an initial public offer (IPO), ET reported, This would increase the need to have more money. 

5G services also need high capital expenditure. With almost all major telcos eyeing to launch 5G soon, the requirement for funds is high. 

Bharti Airtel notified that it crossed one million in the 5G user base on Wednesday. It is also aiming for a full-fledged launch of 5G in the coming months, raising the need for money for at least the next 12-18 months, 

According to a report by Nuvama Institutional Equities, as quoted by ET, "Airtel has been following an optimal 5G strategy by betting on the non-standalone (NSA) 5G version, which is prudent considering 5G NSA can be rolled out much faster and investment is lower as it can leverage existing 4G infrastructure for the coverage layer."

"Besides, currently very few use cases require network splicing and sub-millisecond latency offered by standalone (SA) 5G," it added.

For Vodafone-Idea (Vi), tariff revision has become critical to survive.