Airtel 5G is rolling out in eight Indian cities, though we are yet to hear about the tariffs from the company. Ahead of that, the company told a publication that it’s still finalising 5G plans and details will be released in the “coming few days”. It is also reported that the Airtel 5G won’t be too expensive compared to 4G plans, though the company hopes this changes. It may not be possible since Airtel’s biggest domestic rival, Jio, has already promised to keep 5G prices most affordable in India.
An Airtel senior executive told The Economic Times that higher 5G tariffs at this stage won’t push up the average revenue per user (ARPU) due to the low subscriber base of 5G phones. He even spoke of Thailand where 5G adoption has been low due to high tariffs. This was also pointed out in an article by Thai Enquirer that notes that 5G adoption in Thailand would take time due to a small 5G phone user base, high tariffs, and fewer use cases.
The executive hopes that they are unable to set tariffs that would provide a reasonable return. The publication quoting the company executive notes, “Today, the return on investment is about 7 per cent for the industry. That needs to go up and will only come through ARPU. The decision of what we should price on 5G is not going to change the ARPU equation. That has to be through the overall tariff hikes.”
When Jio launched its 4G in India, rivals like Airtel and Vodafone were forced to bundle benefits like unlimited data and calling. This model remained for a few years, but in December last year, all mobile operators evenly hiked prices of their 4G plans to increase the ARPU. Many analysts predict that another hike may be round the corner soon.
Meanwhile, Jio’s 5G services are also rolling out in four cities on a trial basis. Both Airtel and Jio hope to cover major circles by early next year. Vi, on the other hand, is yet to offer details.(IndiaToday)
