Vodafone Idea joined Reliance Jio and Bharti Airtel to collectively hike tariffs for the first time in three years, to recoup the billions they invested into 5G technology over two years, Reuters wrote.

Vodafone Idea joined Jio and Airtel to hike tariffs (Reuters)

Bharti Airtel and market leader Jio had earlier said they would raise tariffs by 10%-21% and 13%-27%, respectively.

Also Read: Bharti Airtel raises prices after Reliance Jio hikes: These are the new prices

Vodafone Idea, the third player in India’s telecom sector said it would increase tariffs between 10% and 23% across seventeen prepaid and post-paid plans, from July 4.

What are the new prices for Vodafone Idea plans?

The company has raised the entry-level plan, minimum recharge value for 28 days of mobile service, by about 11 per cent to 199 from 179, PTI wrote.

Vodafone Idea has raised the price of a popular 84-day validity plan with 1.5 GB data per day to 859 from 719 earlier.

Also Read: Reliance Jio announces tariff hike from July 3, announces new Unlimited 5G data plans. Details here

The company has increased the price of its annual unlimited plan by about 21 per cent to 3,499 from 2,899 at present.

It has made no change in its 365 validity plan with a 24 GB data limit, which costs users 1,799.

Why were tariffs so low before?

India is the world’s second-largest smartphone market, but has among the cheapest tariffs. Jio’s strategy of rock-bottom prices to lure subscribers meant its peers had to follow or risk losing out by raising prices.

While the companies didn’t raise tariffs since 2021, they spent heavily on boosting their infrastructure and even more on acquiring spectrum waves, including 5G airwaves for the first time in 2022, a year after the last round of tariff hikes.

Also Read: India’s telecom spectrum auction ends early on day two, only 12% of spectrum sold

Jio’s price rise, its third in five years, should boost its average revenue per user (ARPU) by about 17% over the next year, according to the Reuters report, which quoted a Morgan Stanley note dated June 27.

Jio’s ARPU stood at 182 rupees in the January-March quarter. Bharti Airtel reported an ARPU of 209 rupees, a result of it switching strategy a few years ago to focus on higher-paying subscribers. Vodafone Idea had the lowest ARPU at 146 rupees, according to the Reuters report.