Reliance Jio and Airtel May Revise 5G Data Plans, Anticipate 5-10% Price Hike in 2024

As India gears up for the widespread deployment of 5G services, major telecom players Reliance Jio and Bharti Airtel are contemplating strategic changes in their pricing models. Analysts predict a withdrawal of unlimited 5G data plans for premium customers, accompanied by a 5-10% price hike for 5G services in comparison to existing 4G offerings. This anticipated move, set to unfold in the second half of 2024, aims to optimize Return on Capital Employed (RoCE) and drive revenue growth for both telecom giants.

“For nearly a year, Jio and Airtel have been luring customers with 5G services at 4G rates, coupled with unlimited data offerings. However, industry experts foresee a shift in this approach as the telecom giants prepare to roll out 5G services nationwide. Once adoption levels rise, the focus is expected to pivot towards monetization, prompting Jio and Airtel to reconsider their pricing strategies”.

Jefferies, a global brokerage firm, suggests that as 5G coverage nears completion and attention shifts to monetization, both Jio and Airtel might discontinue unlimited 5G data for their higher Average Revenue Per User (ARPU) customers. Instead, they may introduce 5G-specific plans by the end of 2024, potentially priced 5-10% higher than existing 4G plans.

“While these revised plans might come at a premium, operators are likely to sweeten the deal by bundling 30-40% additional data, encouraging adoption and aiming to gain market share. This strategic move could impact Vodafone Idea (Vi), which is yet to launch 5G services and is facing financial challenges”.

Despite these predictions, Airtel’s Managing Director, Gopal Vittal, had previously ruled out an immediate increase in 5G service charges. He cited the absence of applications fully leveraging 5G benefits and indicated a willingness to raise overall mobile tariffs to elevate Average Revenue Per User (ARPU) levels, currently at a little over Rs 200, to around Rs 250.

As the telecom landscape evolves with the impending 5G era, consumers can expect shifts in pricing structures, reflecting the industry’s drive for sustainability and profitability amid significant technological advancements.