Slowdown in Jio's active user growth to hinder tariff hike

WHILE THE ABSENCE of tariff hikes has slowed down the revenue growth of telecom operators in the October-December quarter, continuous weakness in active subscribers' addition by India's largest telecom operator Reliance Jio could further delay any hike in headline tariffs by the operators.

- JATIN GROVER

PEER PRESSURE NOTWITHSTANDING

Peers Bharti Airtel and Vodafone Idea have been pressing for broader tariff hikes for better average revenue per user (Arpu) and to improve their return on capital employed, however, they fear losing market share if the market leader Reliance Jio does not hike the tariffs, analysts said.

In December, Reliance Jio continued its under-performance in the additions of active subscribers for the second straight month, compared to peer Bharti Airtel which witnessed the highest additions of active users in nearly two months, according to data by the Telecom Regulatory Authority of India (Trai).

"During the six-month period ending Feb 21, Jio's active subscriber adds were lower than Bharti by 20 million, leading to lower tariffs and bundled offers being announced by Jio in March 21 for feature-phone users. A continued underperformance in Jio's subscriber additions vs Bharti as seen in Nov/December 2022, could lead to delays in tariff hikes," brokerage house Jefferies said.