Why Indian Mobile Users Could Soon Pay Heftier Bills

Days of cheap data rates and low mobile plans for Indian users might soon come to an end.

Mobile users in India are paying the cheapest rates for data, and even their mobile bills are probably the lowest among most countries. This has been brought about by free outgoing voice calls, no roaming charges and domestic long distance calls cost almost nothing.

These changes were brought about after the entry of Reliance Jio into the telecom sector, forcing competition to bring down prices as well, which meant happy days for the consumers.

However, recent trends suggest that it’s likely that telcos will now look to increase their revenue from users, specifically those who’re willing to pay more for better services. Industry experts have also pointed out that postpaid users in the country might have to shell out more, especially with low-priced plans being shelved by the companies.

According to a recent ET Telecom report, Vodafone has informed users that they are being upgraded from a Rs 199 to Rs 399 postpaid plan, which comes into effect from 10 July this year. To make sense of this upgraded plan, the telco will be offering a slew of benefits, including free one-year access to Amazon’s Prime Video and Music content.

This trend was first seen with Airtel, which reportedly has also discontinued most of its plans below Rs 499, making sure it has users who can help them deliver a better average revenue per user (ARPU) metric.

Telcos have been reeling under big losses for many quarters now, and with falling ARPU becoming a concern, it seems they are willing to sacrifice few users in order to increase their revenue.

Analysts have pointed out, while postpaid users don’t constitute more than 3 percent of the total subscriber base for a telco, their impact shows in the revenue column, with 15 percent of the overall numbers coming from postpaid users.

In this scheme of things, that 15 percent can make a huge difference to the final numbers every quarter.

It’ll be interesting to see if both Airtel and Vodafone Idea Limited are willing to take the risk of continuing to lose users, in order to shore up their coffers, for business sakes. All this clearly points to a change in pricing trends for postpaid mobile users in India, which is likely to show its effect in the next couple of quarters.

With only three telcos now serving over 500 million users in the country, the days of a drop in data rates might be coming to an end sooner rather than later.