Home / News / India /  Private telcos to hike tariffs again; FY23 revenues to jump 25%: Report

India's top three private telecom providers - Bharti Airtel, Reliance Jio and Vodafone Idea - are likely raise tariffs again in the second half of this fiscal year, says a report. According to a report released on May 31, India's top three private telecom providers will raise tariffs again in the second half of this fiscal year, resulting in revenue increase of 20-25 percent for FY23. 

In a report, the domestic rating agency Crisil's research wing stated that growth in average income per user is critical for the industry to invest in the network and spectrum, and that if it does not, it would result in poor service offerings. Following years of strong rivalry, the industry began raising pricing in December 2019 after the advent of Reliance Jio.

"...revenue of the top three players is expected to grow a robust 20-25 percent this fiscal," the note said, adding that the operating profit margin will expand by 1.80-2.20 percent during the fiscal.

It added that following a modest 5 percent increase in ARPU (Average Revenue Per User) in FY22, the critical statistic is likely to rise by 15-20% in FY23 as the full impact of the previous fiscal's hikes plays out, as well as on the back of newer hikes due in the second half of this fiscal.

Because players are likely to spend more on network and regulatory capex in FY23, it is possible that ARPU growth and tariff hikes would relieve some of the pressure on their books, according to the report.

The overall number of subscribers fell in the previous fiscal year as 3.70 crore inactive users were weeded out, according to the study, but active subscribers increased. According to the report, the three biggest telecom companies had a 3 percent increase in active customers, with 2.90 crore new members added to the tally.

Between August 2021 and February 2022, Reliance Jio's entire subscriber count dropped dramatically. However, the company's active subscriber share increased to 94 percent in March 2022, up from 78 percent in the first quarter of the previous fiscal year, according to the company, which also stated that Bharti Airtel added 1.10 crore active subscribers during the fiscal year, bringing its active user share to 99 percent.

Vodafone Idea had a "mixed bag" of results in FY23, with the business losing three crore active users due to poor 4G expenditure and "deterioration of services," according to the rating agency.

(With PTI inputs)

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