Will Jio, will it not?
PremiumFor sufficient competition to prevail in India’s long-battered telecom sector, it would be best if it does
After Bharti Airtel, Vodafone Idea got into the act. On Tuesday, Vodafone Idea raised pre-paid mobile service tariffs by 20-25%, matching Airtel’s hike. With two of our three big private players having set out to normalize tariffs, compressed by a price-war of attrition that followed Reliance Jio’s market entry five years ago, all eyes have now turned to Jio. Will it follow suit? For sufficient competition to prevail in India’s long-battered telecom sector, it would be best if it does. Jio has already swept ahead of its two principal rivals, and gaining switch-overs on the lure of lower data and call charges may not lend it much of an extra advantage now. Commensurate price hikes on its part, instead, would signal a sector-friendly policy and leave Airtel and Vodafone Idea that much more space to shore up their finances.
Recall that Vodafone Idea till recently was on the verge of collapse. Telecom operators have since got relief on government dues and seen investor interest return. A crisis of low market rivalry was averted, but India’s average revenue per user is still far too low. An industry that is as vital as this to digitization needs must thrive sustainably for better overall economic outcome.
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