Telecom companies in India have recently announced a significant increase in their tariffs, with prices rising by 20% to 27% across almost all recharge plans. While the free 5G offer remains for plans exceeding 2GB per day, it’s clear that using your mobile phone is about to become more expensive.

Why the Price Hike?

There are two main reasons behind this sudden increase. First, the telecom companies have faced mounting expenses, particularly after the 5G spectrum auction in 2022. Acquiring 5G spectrum and investing in necessary infrastructure has been a massive financial undertaking, with recent auctions adding another ₹ lakh crore to their expenses. These investments aren’t one-time costs; the companies must pay for the spectrum in installments, further straining their finances.

Second, the subscriber base for telecom companies has plateaued. New users aren’t signing up, and existing users are either not recharging or switching to other operators. This stagnation has led to concerns about the sustainability of current pricing models. Telecom companies argue that raising tariffs is necessary to maintain service quality and invest in future network improvements.

Impact on Consumers and Future Outlook

This price hike will undoubtedly affect consumers. The most immediate impact is the higher cost of mobile recharge plans. Some users may choose to discontinue their old connections due to the increased prices, potentially reducing the overall network load. However, this could also lead to improved network quality and signal strength.

Looking ahead, we can expect telecom companies to focus on stabilizing 5G services and addressing issues like speed drops. Once the 5G experience improves, they will likely introduce separate paid plans for 5G, further increasing the cost of mobile data. Some experts predict this could happen within the next 6-8 months.

To wrap things up

The recent price hike by telecom companies is a result of their rising expenses and stagnant subscriber base. While the free 5G offer continues for high-data users, we can anticipate the introduction of separate 5G plans in the near future. As the telecom companies strive to improve their 5G services, consumers should brace themselves for a more expensive mobile experience.