Major tariff increases by telecom operators unlikely in the short term: analyst


Telecom operators will likely continue to make minor changes to mobile plans, but could avoid a significant increase in broader tariffs in the near term, as they prioritize market share gains amid ongoing industry challenges, according to a senior analyst at Deloitte India.

Telecom partner and industry leader Deloitte India Peeyush Vaish told PTI that despite the current challenges, the telecom sector offers room for growth, especially in areas such as broadband and 5G, including the advent is expected to boost revenue streams for telecommunications companies.

“Until now, operators have been rolling out one-size-fits-all products, but in the last 6-8 months they have started to identify premium subscribers and are looking at how to tap into those user segments, who can pay more for more. convenience or services, ”he said.

As a result, while some marginal tariff adjustments may occur in specific pockets, a larger tariff increase is unlikely in the short term, he added.

“I don’t think we are seeing any significant price movement in the short term.

There may be marginal fixes, some operators may abandon their lowest plan… but I don’t think this will lead to any significant changes in operator mixed ARPUs (average revenue per user), ”Vaish noted.

Instead, telecom operators may choose to focus on grabbing the subscriber base to increase their market share.

“Anyway, given that tariffs are likely to see a change in the 5G environment, why would operators want to disrupt the basket of apples, in the short term,” he explained.

Any significant price increase can now be disruptive for operators rather than the market, he argued. “If anything untoward happens in the industry in the next 3-4 months, then the goal of the remaining operators will be to tap into the subscriber base,” he said.

Vaish thinks the government is unlikely to interfere with the floor price issue.

He further said that while so far a large part of the revenue generated by telecom operators has come from the retail segment, this mix may change with the arrival of 5G.

“With 5G, we could see a lot of revenue generated by the business segment, for example, in applications like education, e-health. It could be a bigger revenue stream for telecom operators.” , did he declare.

The comments come at a time when the telecommunications industry, under the umbrella of the apex COAI association, is pushing for lower levies and other relief measures to address sustainability concerns.

The Cellular Operators’ Association of India (COAI) recently wrote to telecommunications secretary Anshu Prakash, amid an existential struggle by mobile operator Vodafone Idea in a private three-player market.

The association stressed that telecommunications remains one of the most heavily taxed sectors, and added that the government must recognize that the current revenue sharing regime of around 32% of revenue in the form of taxes and levies does not is “not viable”.

Such a high incidence of levies would be detrimental to industry growth due to the continued lack of excess cash to reinvest, the industry argued.

Some industry watchers, in fact, have warned that the industry could be heading towards a duopoly, in the absence of relief measures that could help the crisis Vodafone Idea Ltd.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

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