Reliance Jio kicks off Indian telecom price hike

Reliance Jio, India’s largest telecoms operator, has initiated what analysts expect to be an industry-wide increase in tariffs in the world’s second largest wireless market, raising some of its plans by more than 20%. 

Jio’s revised pricing structure, effective July 3, sees its entry-level Rs 155 ($1.87) plan, offering 2GB of data and unlimited calls, increase to Rs 189. Similarly, a plan providing 1GB of daily data usage will rise from Rs 209 to Rs 249. Jio is raising prices of its two-month, three-month, annual, postpaid, and data add-on plans as well.

Jio, a subsidiary of the Indian conglomerate Reliance Industries, disrupted India’s wireless market last decade with its extremely affordable cellular plans. The move compelled established competitors to significantly reduce their own prices.

Akash Ambani, Chairman of Reliance Jio, said in a statement Thursday that new move is a “step in the direction of furthering industry innovation and driving sustainable growth through investments in 5G and AI technology.” (It’s worth a reminder that even after the price hikes, Jio’s offering is among the world’s most affordable.)

Reliance, Bharti Airtel, Vodafone-Idea and BSNL-MTNL dominate the Indian wireless market. Jio commanded more than 40% of the market as of April, with its nearest rival, Airtel, at 33.1%. 

Analysts have been forecasting a significant shift in the industry’s pricing strategy for months. The consensus view projected an increase of 15-25%, a move seen as crucial for stabilising and growing average revenue per user. 

The price hike will underscore the sector’s transition from a focus on market share acquisition to sustained monetisation, analysts said, coming as operators near the completion of their 5G coverage rollouts. Indian telecom operators spent more than $20 billion in buying 5G airwaves alone. They have been scrambling to find ways to make more money. Last year, they proposed that tech firms pay the telecom companies for network usage.

Indian consumers are likely to accept the price increases because, as Bank of America eloquently put it, there’s “a lack of alternatives/improving stickiness of data offerings.”