Bhubaneswar, July 19: Reliance Jio’s marketing strategy took the world by storm when it acquired 50 million subscribers within three months of its launch. Due to its cut-throat pricing and latest technology, Jio could revolutionise the Indian internet ecosystem and digital landscape. But will the recent price bump due to tariff hikes alter the narrative or will the consumer market accept these changes?

After a gap of three years since the last tariff spike in December 2021, 10-25% hikes in telecom tariffs came into effect on 3rd July, 24. Reliance Jio led with a tariff increase of 12-25%, followed by Airtel with hikes ranging from 11% to 21% across its prepaid and postpaid plans. Vodafone Idea (Vi) also increased tariffs by 10-23%.

"There is enough competition in the telecom sector and the situation is not as critical to require intervention of the authorities since these markets operate through forces of demand and supply,” as reportedly stated by some government stakeholders. Officials stated that telecom tariff rates are still among the cheapest in the world.

Reliance Jio has hiked its tariffs by 10% to 27%, which shall push up the monthly mobile and data bills for households. For example, Jio's annual unlimited plan has increased from ₹1,799 to ₹1,999. With the increase of Rs 200, a three-member family (If all of them use Jio services) will spend an additional ₹600 monthly and ₹7,200 annually.

Amid the rise in tariffs, a certain number of small-scale recharge retail stores have also reported a sizeable decline in the frequency and size of data plans being chosen by people belonging to the lower-middle income brackets. “Although Jio’s internet speed, coverage, and bandwidth are satisfactory, recent price rises have led us to cut back on the volume of recharges and forced us to rethink our monthly/yearly data usage. With subsequent hikes in tariffs by other network providers, we are also feeling the pressure of a lack of alternatives to Jio”, as stated by 6-7 middle-income households in a survey.

In the short run, such a rise might imply cutting back on discretionary spending such as dining out, entertainment, or other non-essential purchases. But in the long run, the tariff hikes are envisioned to enhance the sustainability and quality of telecom services. The focus is to protect the interests of subscribers, enable orderly growth with investments in the latest technologies like 5G/6G, and ensure financial viability.

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(By Rachita Priyadarshini)

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