Jio, Airtel unlikely to hike tariffs as stiff competition builds up

The agency pointed out that there is a close contest between the top two telcos, when one goes by active subscriber base with Jio’s share at 33.7 per cent and Airtel’s at 33.6 per cent.
Bharti Airtel. (File Photo| Reuters)
Bharti Airtel. (File Photo| Reuters)

NEW DELHI:  Two major telecom companies Bharti Airtel and Reliance Jio are neck and neck in terms of active mobile subscriptions, and hence the industry is unlikely to see any unanimous tariff hikes in 2021-22, according to a Crisil Ratings report.

The agency pointed out that there is a close contest between the top two telcos, when one goes by active subscriber base with Jio’s share at 33.7 per cent and Airtel’s at 33.6 per cent. “The active subscriber market share data indicates the top two players are neck and neck, with neither ready to bite the bullet and raise tariffs,” it said.

The build-up in competitive intensity also indicates that the industry is unlikely to see unanimous tariff hikes at least in the near term, limiting a large upside in average revenue per user (ARPU) in fiscal year 2022. However, a price war like the one seen before 2019 is unlikely and competition will be indirect in the form of tie-ups with smartphone manufactures low-cost phones, increased bundling of OTT content, etc.

The report said there is an universe of 250-300 million active non-4G subscriber base, which will be on the radar of the telcos for conversion to 4G users in order to increase revenues. 4G mobile data subscribers to rise to 820 million by the end of March 2022 higher than in the last fiscal.

“The pandemic slowed 4G subscriber additions to 12 million in the June 2020 quarter, with smartphone shipments probing new lows. However, the March 2021 quarter would have been better because India’s 4G subscriber base is expected to have risen to 710-720 million in fiscal 2021”, the agency noted.

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