According to industry analysts, Airtel and Reliance Jio, telecommunication operators in India, plan to change their strategy after a year of providing free 5G services at the cost of 4G. Both companies intend to start charging for 5G services in the second half of 2024. The main goal of this change is to increase monetization and revenue growth.
It is expected that Airtel and Reliance Jio will introduce special 5G plans for their most demanding customers while discontinuing unlimited 5G data packages. The prices of these new plans are projected to be at least 5-10% higher than their 4G counterparts. Additionally, mobile phone charges may increase by at least 20% in the third quarter of 2024. This will help increase the Return on Capital Employed (RoCE) in the face of significant investments in 5G technology and rising customer acquisition costs.
Although the absolute prices of these 5G plans may be higher, Airtel and Reliance Jio may offer their customers 30-40% more data within these offers. This strategy aims to encourage the adoption of this technology and gain a larger market share, potentially at the expense of Vodafone-Idea (Vi), which is currently facing financial difficulties.
Gopal Vittal, the CEO of Airtel, previously ruled out imposing additional charges for 5G services in the near future. However, he mentioned considering raising overall mobile phone fees to increase the Average Revenue Per User (ARPU), also known as average revenue per customer, from the current level of about 200 Indian rupees to around 250 Indian rupees.
Currently, Airtel and Reliance Jio have a combined total of over 125 million 5G service users, and the overall number of 5G users in India is expected to reach approximately 200 million by the end of 2024. This upcoming shift towards charging for 5G services indicates a mature stage for the telecommunications industry in India, where service providers are increasingly focusing on long-term monetization and growth opportunities.
Frequently Asked Questions (FAQ):
The source of the article is from the blog japan-pc.jp