Good news for Mukesh Ambani over New Year, Reliance Jio's AGR rises by…, Sunil Mittal’s Airtel follows him in…

This performance of Reliance Jio, Airtel underscores the shifting landscape of India's telecom industry, where operators are leveraging price adjustments to strengthen financial health amid competitive pressures.

In July 2024, private telecom operators Airtel, Jio, and Vodafone Idea implemented a significant tariff hike, increasing mobile service rates by 11-25%. This move brought substantial changes to the industry's financial performance and user dynamics.

Industry Revenue Surge Post-Tariff Hike

According to a report by the Telecom Regulatory Authority of India (TRAI), the gross revenue of India's telecom operators rose by 10.5% year-on-year to Rs 91,426 crore in the July-September 2024 quarter. Adjusted Gross Revenue (AGR), which forms the basis for government levies, saw an even sharper rise of 13.11%, reaching Rs 75,310 crore compared toRs 66,583 crore during the same period last year.

Reliance Jio Leads AGR Growth

Mukesh Ambani's Reliance Jio reported a 14.19% year-on-year increase in AGR, amounting to Rs 27,652.68 crore. Meanwhile, rival Bharti Airtel, led by Sunil Mittal, outperformed with a 24.15% AGR growth during the same period. Vodafone Idea's AGR rose modestly by 4.39% to Rs 7,836.98 crore, and BSNL reported a 1.54% increase to Rs 1,996.77 crore.

Impact On ARPU And Subscriber Base

The tariff hikes significantly boosted the operators' Average Revenue Per User (ARPU). Monthly ARPU for mobile services climbed 9.60% quarter-over-quarter to Rs 172.57 in the September quarter, compared to Rs 157.45 in the June quarter. On a year-on-year basis, ARPU increased by 15.31%.

ARPU for prepaid services, which dominate India's telecom market, stood at Rs 171, while postpaid ARPU reached Rs 190.67. However, the increased tariffs also led to a decline in the mobile subscriber base. The total number of subscribers dropped by 1.68 crore, falling from 117 crore in the June quarter to 115.37 crore in the September quarter.

Industry Dynamics and Future Outlook

Despite losing subscribers, the tariff hikes have positioned telecom operators for stronger revenue growth. While Airtel and Jio reported robust AGR growth, Vodafone Idea and BSNL saw modest gains, highlighting their continued struggle to compete with market leaders. The industry is likely to focus on balancing revenue growth with subscriber retention in the coming quarters.