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Airtel and Reliance Jio Ending Unlimited 5G Data Offers: Changes in Pricing

Airtel, Reliance Jio

HIGHLIGHTS:
  • Airtel and Jio may increase 5G prices by 5-10% soon.
  • New 5G plans may include 30-40% more data to encourage usage.
  • Airtel and Jio adjusting prices to lead 5G market as Vi yet to introduce services.

In October 2022, India witnessed the advent of 5G services, with industry giants Reliance Jio and Bharti Airtel leading the way. With a combined subscriber base exceeding 125 million, both companies initially lured customers with the promise of 5G connectivity at existing 4G rates, coupled with unlimited 5G data on selected plans. However, recent reports suggest that this era of unlimited 5G data might be coming to an end.

Shift in Pricing Strategy:

Analysts indicate that Reliance Jio and Airtel are poised to discontinue their unlimited 5G data offerings. Instead, starting in the second half of 2024, customers may experience a 5-10 percent increase in 5G plan charges compared to existing 4G plans. This change is seen as a strategic move to enhance monetization and boost revenue growth in the evolving 5G landscape.

Reasons Behind the Change:

The decision to modify pricing structures aligns with the anticipation of widespread 5G adoption, with projections suggesting over 200 million 5G users in India by the end of 2024. To address the significant investments in 5G infrastructure and growing customer acquisition costs, both Jio and Airtel are contemplating a shift towards a more sustainable revenue model.

Impact on Consumers:

While the adjusted 5G plans are expected to be marginally more expensive than their 4G counterparts, customers may find solace in the inclusion of 30-40 percent more data in these revised bundles. This strategic move aims to incentivize usage and simultaneously solidify the market share of Jio and Airtel, particularly as Vodafone Idea (Vi) is yet to introduce 5G services.

Financial Considerations:

Industry experts speculate that mobile charges could witness an increase of at least 20 percent in the September quarter of 2024. This adjustment is aimed at improving the Return on Capital Employed (RoCE), allowing the telecom giants to navigate the challenges posed by investments in 5G technology.

The Competitive Landscape:

With Vi still on the sidelines in the 5G race, Airtel and Jio are positioning themselves strategically. By offering enhanced data bundles, they aim not only to justify the adjusted pricing but also to secure a stronger foothold in the market as the primary 5G service providers in India.

Verdict:

As India advances further into the 5G era, telecom leaders like Reliance Jio and Bharti Airtel are recalibrating their pricing strategies to ensure sustainability and growth. While consumers may witness a slight uptick in costs, the additional data allowances and improved network capabilities are expected to balance this shift. The evolving dynamics of the 5G landscape in India signal a new chapter in telecommunications, where both providers and consumers must adapt to ensure a seamless transition into the future of wireless connectivity.