India Business Journal - Telcos hit by losing customers over tariff hikes and competition from satellite players

INDUSTRY

Telcos hit by losing customers over tariff hikes and competition from satellite players

IBJ Bureau
Dec 29, 2024

The country’s private telecom operators (telcos) face twin challenges on investment recovery in the new year, with customers leaving their network after tariff hikes and satellite players, mainly Elon Musk’s Starlink, eyeing a chunk of their bread-and-butter data business.

Private operators have invested around Rs 70,000 crore in telecom infrastructure and radiowave assets this year to expand the coverage of next-generation 5G services which is one of the main highlights of 2024 for the sector.

To recover investments and protect margins, private telcos resorted to tariff hikes in the mid-year, but that move backfired.

Around 2 crore subscribers dropped their connections. Reliance Jio, Bharti Airtel and Vodafone Idea jointly lost 2.6 crore customers due to a 10 to 26 per cent price hike.

Despite subscribers’ loss, private players need to recover investment and invest more in 5G to offer new-age services to drive future growth.

According to EY India Markets and Telecom leader Prashant Singhal, the cumulative investment of Reliance Jio, Bharti Airtel and Vodafone Idea was around Rs 70,200 crore in 2024.

Digital Infrastructure Providers’ Association (DIPA) Director General Manoj Kumar Singh says that the telecom infrastructure sector looks at a cumulative investment of Rs 92,100 crore to Rs 1.41 lakh crore in 2022-2027 to support the 5G ecosystem.