Will Centre intervene in Airtel, Reliance Jio tariff hikes? ‘Not important’
Officials familiar with the matter told ET that the government and telecom regulators will not intervene or stop telecom companies from raising prices. According to the report, the officials said tariffs in India are still among the cheapest in the world and want companies to focus on quality of services.
“The telecom industry is sufficiently competitive, and the current state of affairs does not necessitate government intervention. Although the price increase may cause some discomfort for customers, it has been happening for three years.”
The three private telecom companies in India increased their mobile tariffs by 11-25% this week. This will support the amount that businesses in urban India spend on telecom services, which is expected to increase from 2.7% of household expenditure in FY24 to 2.8% in FY25.
For rural households, it will increase from 4.5% to 4.7%, but officials have termed this hike as “moderate”.
“The analysis shows that the 13% (average) increase in tariffs is moderate, and is unlikely to have much impact on household spending. It also demonstrates that consumers are likely to accept higher tariff hikes from Jio and 5G monetisation well, according to a note from Axis Capital. Meanwhile, a senior official of the Telecom Regulatory Authority of India (TRAI) said, “There is a policy of tolerance in telecom tariffs and telcos are free to decide tariffs. But they have to provide good quality service to consumers,” according to the report.
