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<ul><li>Bharti Airtel and Vodafone Idea hiked their tariffs which will take effect from December.</li><li>This time around, their arch rival Reliance Jio might follow suit.</li><li>A few weeks back, Jio faced a customer backlash for increasing tariffs by<a href="https://www.businessinsider.in/business/news/mukesh-ambanis-jio-faces-backlash-for-tariff-increase/articleshow/71573757.cms"> a mere six paise.</a></li></ul>Like in mythical stories, a great adversary leads to an unexpected windfall. Cornered into paying up as much as<a href="https://www.businessinsider.in/business/news/reliance-jio-airtel-and-vodafone-idea-may-raise-tariff-soon/articleshow/71757089.cms"> ₹92,000 crore in past</a> dues to telecom department --- Bharti Airtel and Vodafone Idea did something they wouldn’t have otherwise dared to --- increase tariffs starting December. This time around, their arch rival Reliance Jio might follow suit. Just a few weeks back, they faced a backlash for increasing tariffs by<a href="https://www.businessinsider.in/business/news/mukesh-ambanis-jio-faces-backlash-for-tariff-increase/articleshow/71573757.cms"> a mere six paise after government</a> made them pay Interconnect Usage Charge (IUC) to other players. But this time, it might be an opportunity go with their rivals. State-owned BSNL and MTNL are not real competition and are now consumed with staying afloat from heavy debt. This time around, Jio can ride the tariff hike wave without bellyaching<a href="https://m.economictimes.com/industry/telecom/telecom-news/jio-faces-customer-rage-on-twitter-over-move-to-charge-voice-calls/articleshow/71532717.cms"> from consumers</a> and trolling by rivals, unlike the last time. More importantly, Jio’s tariffs are lower than that of Vodafone and Idea by at least 30%, which means even if they increase tariffs, they will still be the cheapest. They can maintain their competitive advantage—without ruffling many feathers. Jio might not look and sound as desperate as their competitors due to a recent<a href="https://www.businessinsider.in/mukesh-ambanis-reliance-jio-raises-25215-crore-for-its-invits-from-canadian-fund-brookfield/articleshow/70295640.cms"> equity infusion</a> from a Canadian investor – but they too need tariff hikes. “Jio would have to increase tariffs as there is no way that they can carry on at the rate that they are going. It is just a matter of time,” Alok Shende, telecom expert and managing director at Ascentius Insights told Business Insider India, before the SC order. However, Jio might have another hurdle as it has set new subscriber addition targets of attaining 500 million subscribers, as announced. And it still has a few million more to add as its subscriber base is currently at 348 million. “RJIO’s pricing hinges on its aspiration of 500 million subscriber base and parent Reliance Industries’ aspiration of paring net debt to zero. Hence, considering higher subscriber acquisition target, we argue the company may delay tariff hike by a few quarters. That said, given the company’s ballooning debt and its commitment to reduce debt, tariff hikes look certain,” said a CLSA report in October. While it might end the ultra low tariff party for subscribers, if Jio too joins in the bandwagon that Airtel and Vodafone started--- it will end the second telecom tariff war. That is the good news that telecom investors have been waiting for years now. SEE ALSO <a href="https://www.businessinsider.in/business/telecom/news/airtel-and-vodafone-idea-plans-to-hike-tariffs-after-posting-record-losses/articleshow/72119603.cms">Airtel and Vodafone Idea hike tariffs after posting record losses</a> <a href="https://www.businessinsider.in/business/news/reliance-jio-airtel-and-vodafone-idea-may-raise-tariff-soon/articleshow/71757089.cms">Whether you use Jio, Airtel, Vodafone-Idea, get ready to pay more for mobile services— sooner than later</a> <a href="https://www.businessinsider.in/business/news/mukesh-ambanis-jio-faces-backlash-for-tariff-increase/articleshow/71573757.cms">Reliance Jio is paying the price for being the ‘second SIM’ of choice</a>

Reliance Jio gets a golden opportunity to hike tariffs and still stay ahead of rivals

<ul><li>If Vodafone has to pay up $4 billion, it might not be able to survive, say analysts. </li><li>If the market ends in duopoly, there could be a ‘real’ tariff hike in the offing which will spoil the cheap data party for the market. </li><li>India has 581 million data subscribers and many of them consider data a utility. </li></ul>This might be the last year that Indians can stream movies on mobile phones with reckless abandon. Everyone has expected Jio to increase tariffs at “some point in time”. But yesterday’s Supreme Court verdict on adjusted gross revenue (ADR) has hastened it. It means Airtel and Vodafone have to cough up over ₹50,000 crore and will definitely weaken them. What is good news for Jio could also be bad news for customers. There are two possible scenarios from here. If DoT decides to waive the penalties and interests that these telcos have to pay, then Vodafone might survive. If that happens, then Jio will continue with its plan to acquire 500 million subscribers in all and initiate a tariff hike in another year, as per Spark Capital’s predictions. A real tariff hike could hit telecom customers This will also be a ‘real’ tariff hike which means Jio might not just cover the 30% price gap it has with other telecom players, it might go ahead and increase more. For one, Airtel and Vodafone had launched 4G data services at ‘introductory prices’ when the market growth was not as fast. The entry of Jio with ‘cheap’ plans has changed that. Now India has 581 million data subscribers and consumption is also growing indicating an ‘addiction’. It means, the market is just right for a price hike. If Jio rises prices, others will follow suit. A dangerous duopoly might hurt Indian consumers In the second scenario, DoT might not waive tariffs and penalties turning India into a ‘dangerous’ duopoly with only Jio and Airtel left. If Vodafone has to pay up $4 billion, it might not be able to survive, say analysts. In this scenario, Jio will race faster to the finish line as a large number of subscribers are up for grabs. As per the research report, Jio could get a tad more ambitious and increase its subscriber acquisition number to 600 million or more. It would also provide it with around 50-55% of market share and it would provide it disproportionate power to price it as it wants. But these price hikes may be delayed by another year so that Jio has acquire an extra 150 million users. Then again, it might turn vigorous. The other player Airtel will also price aggressively going ahead, bringing India data prices on par with international levels—which will make it unaffordable to the many who enjoy it now.

Whether you use Jio, Airtel, Vodafone-Idea, get ready to pay more for mobile services— sooner than later

Jio's new ₹599 ‘all-in-one’ subscriptions offer the biggest bang for your buck

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Reliance Jio gets a golden opportunity to hike tariffs and still stay ahead of rivals

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Whether you use Jio, Airtel, Vodafone-Idea, get ready to pay more for mobile services— sooner than later

Katya Naidu

Jio's new ₹599 ‘all-in-one’ subscriptions offer the biggest bang for your buck

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