The Indian telecom industry currently stands in a very weird spot right now. The fifth-generation 5G network stands on the door of the Indian consumer market, and the telecom companies are already conducting testing for this network. On the other hand, the burden of financial bearings like the unexpected AGR dues, the spectrum allocation dues, and above all, the unsustainable tariff rates, which are too low for an industry this big, plague the insides of these companies. While on the face value, it might seem like higher data consumption in India might translate to a lot of earnings for the telecom companies. But, we wish the picture was this simple and rosy. The fact rests that a tariff hike in the near term is inevitable.
The How and When of Tariff Hike
Now that we know that a tariff hike is somewhere on the horizon, the next question comes as to how it is to be implemented and when will it hit the consumers. Coincidentally, those are exactly the two areas where the telecom companies can decide to do justice to the consumers and bring some transparency into the price hike process. The last time the price hike was done by the telecom companies was in 2019. Since then, the prices of the data plans have remained largely the same. The first thing that the telecom companies can do is gently nudge the consumers towards favourable rates. As we have seen in the past, the telecom industry in India is a ruthlessly competitive market, and the companies fight tooth and nail to retain and bring in more subscribers. But, this leads to an environment where some companies run on low tariffs for long years for fear of losing subscribers. What can be done in this regard is an annual tariff hike or a semi-annual one wherein the telecom companies gently raise the tariff on the existing plans by a certain percentage. This tariff hike would not only bring some transparency and remove the shock element from these events but would also help the consumers in adjusting and paying for the rising operational costs which the telcos might be bearing.
Restructuring Plans to Ease the Consumer Burden
The dried-up revenue source of IUC is another factor why the telecom companies are suddenly in a financial dilemma now. To make the tariff hike process smoother for the consumers in the coming months, the telecom companies might also provide other options in the plans’ portfolio. For example, some of the extra benefits like OTT services, extra data etc., can be dropped to provide a forked plan structure which gives the option to consumers to choose from many plans. Not only this, Vodafone Idea’s data rollover and weekend binge features are something that should be adopted by the industry widely among all telecom companies. Lastly, the telecom companies recognise the need for a data hike in the coming days, and instead of hanging up on the rope for fear of subscribers churn, the tariff hike is not something that the industry should be running away from but instead embracing in a practical and well thought of manner.
