Following Vodafone Idea and Bharti Airtel, Reliance Jio too has announced that it will increase tariffs over the next few weeks.
“We will..take measures including appropriate increase in tariffs in next few weeks in a manner that does not adversely impact data consumption or growth in digital adoption and sustains investments,” the company said a day after Bharti Airtel and Vodafone Idea issued similar statements.
The statements come in the wake of a Supreme Court judgment that slapped extra liabilities of around Rs 90,000 cr on the industry, out of which nearly Rs 50,000 cr would fall on Vodafone Idea and most of the remaining will fall on Bharti Airtel.
Jio caused a massive decline in voice and data tariffs when it entered the market in 2016, at a time when 1 GB of wireless data used to cost Rs 240.
At present, 1 GB of wireless data costs only around Rs 4 on an industry level, and around Rs 3 for Jio customers.
Even as it announced its intention to raise prices, the Mukesh Ambani company did not forget to remind everyone about the crucial role it played in making data accessible to everyone.
“Jio has enabled India as the world’s largest data-market growing from 20 crore GB per month in 2016 to over 600 crore GB per month now,” it pointed out.
Despite its roaring success, there are still many analysts who raise questions about the long-term sustainability of Jio’s business model, especially given the high level of investments the company has made into the business.
HOW MUCH INCREASE?
The key question on most consumers’ minds would be by how much Jio plans to increase tariffs, and what form it will take.
The company has already committed to never charging for voice calls, which means that the price increase will have to be effected on the data part of its plans.
At present, the company offers 2 GB of data per day for around Rs 4 per day under its most cost-efficient scheme.
While the telco did not give any clue about how much of an increase it would make in its prices, it said it would try to ensure that the increase would not affect the quantum of data consumed by subscribers.
It also said it would compete on the basis of ‘quality and service’ — an indication that it may not focus on pricing and efficiency as its USP, as has been the case so far.
“While ensuring Jio’s commitment to a sustainable sector, Jio will compete on the basis of quality and service in the marketplace and as a customer-obsessed organization, we will always provide the best service to all our customers,” it said.
It said it remains committed to “helping India to sustain its global leadership as the world’s largest data market.”
The company recently unveiled its fiber broadband plans, under which it offers 1,000 GB per month Rs 1,533 per month, pricing 1 GB at Rs 1.53.
The exact quantum of increase in tariffs will partly depend on the increases announced by Airtel and Vodafone Idea, as well as on the desired utilization levels Jio wants for its network.
Airtel and Vodafone Idea have maintained that the current prices of data and voice are grossly inadequate to meeting operating expenses, and are likely to increase prices by around 25%.