Days of free 5G may soon be over: Airtel and Reliance Jio may start charging subscribers for 5G data, here’s how
The era of complimentary 5G services appears to be reaching its conclusion. Reliance Jio and Airtel have been providing customers with unlimited 5G data at 4G rates for over a year, but this phase of cost-free offerings may soon come to an end. Analysts predict that in the latter part of 2024, both Airtel and Reliance Jio might implement charges for their 5G services. According to a report from the Economic Times, the companies are expected to discontinue the provision of unlimited 5G data for premium customers and introduce pricing that is at least 5-10% higher than their existing 4G packs. These new prices are anticipated to be rolled out in the second half of 2024.
The move is said to be aimed at driving monetization and boosting revenue growth, analysts said. Industry experts also expect the two telecom operators to raise mobile tariffs by at least 20% in the September quarter of 2024 to improve their RoCE (return on capital employed) amid intensive investments on 5G and higher customer acquisition costs. The two other telecom players in the Indian market Vodafone Idea (Vi) and government-owned BSNL are still to introduce 5G services.
May roll out 5G-specific plans
“With rising focus on monetization and 5G coverage near completion, we believe the telcos (Jio and Airtel) may stop offering unlimited 5G data to their higher-ARPU data customers and announce 5G-specific plans towards 2HCY24,” Jefferies said in a research note .
The global brokerage company further added that while the absolute price-points for Airtel and Reliance Jio’s 5G plans may be 5-10% higher than 4G, the telecom major may bundle 30-40% additional data in such plans to spur adoption and drive market share gains at the expense of cash-strapped Vi.
Incidentally at Airtel’s last earnings call in November 2023, managing director Gopal Vittal had ruled out charging more for 5G services anytime soon. He, however, said that Airtel won’t hesitate to take the lead in raising overall mobile tariffs at the right point to increase monthly average revenue per user (ARPU) levels to around Rs 250 from a little over Rs 200 currently.
Between them, Jio and Airtel already have around 125 million 5G subscribers, and the country’s total 5G user base is set to exceed 200 million by the end of 2024.
The move is said to be aimed at driving monetization and boosting revenue growth, analysts said. Industry experts also expect the two telecom operators to raise mobile tariffs by at least 20% in the September quarter of 2024 to improve their RoCE (return on capital employed) amid intensive investments on 5G and higher customer acquisition costs. The two other telecom players in the Indian market Vodafone Idea (Vi) and government-owned BSNL are still to introduce 5G services.
May roll out 5G-specific plans
“With rising focus on monetization and 5G coverage near completion, we believe the telcos (Jio and Airtel) may stop offering unlimited 5G data to their higher-ARPU data customers and announce 5G-specific plans towards 2HCY24,” Jefferies said in a research note .
The global brokerage company further added that while the absolute price-points for Airtel and Reliance Jio’s 5G plans may be 5-10% higher than 4G, the telecom major may bundle 30-40% additional data in such plans to spur adoption and drive market share gains at the expense of cash-strapped Vi.
Incidentally at Airtel’s last earnings call in November 2023, managing director Gopal Vittal had ruled out charging more for 5G services anytime soon. He, however, said that Airtel won’t hesitate to take the lead in raising overall mobile tariffs at the right point to increase monthly average revenue per user (ARPU) levels to around Rs 250 from a little over Rs 200 currently.
Between them, Jio and Airtel already have around 125 million 5G subscribers, and the country’s total 5G user base is set to exceed 200 million by the end of 2024.
