Mobile phone users may experience a major shock following the Lok Sabha Elections 2024 that are now taking place across the country. According to reports from the Economic Times, mobile phone bills might increase by almost 25% after the election. In an effort to increase revenue, telecom providers are preparing for their fourth round of rate increases in recent years.
Reasons Behind the Anticipated Tariff Hike
According to a report by the brokerage firm Axis Capital, the firms appear to boost income by raising 25% of the tariff with the assistance of the government as a result of growing consumer demand and investments in 5G technology. The research claims that, despite the hike’s seeming size, it is a fair adjustment given the rising internet data use of both urban and rural people.
Projected Impact on Urban and Rural Consumers
Those who live in cities and typically spend 3.2% of their income on telecom services may see a little rise to 3.6%. On the other hand, telecom spending among rural customers, who now spend 5.2% of their income on it, may increase to 5.9%. The Average Revenue Per User (ARPU) is predicted to increase by 16% if telecom providers move forward with a 25% increase in the base plan. For Airtel and Jio, this means an increase in profits per subscriber of Rs. 29 and Rs. 26, respectively.
25% Tariff Hike: What It Means for You?
One must wonder what impact a forthcoming tariff rise will have on the general public. For example, if a person usually recharges for Rs 200 per month, the raise may result in an extra cost of Rs 50, making the total cost of recharging to Rs 250. In the same way, a recharge of Rs 500 would increase by Rs 125, and a recharge of Rs 1000 may increase by Rs 250, making the total rate Rs 1250.
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