Mobile phone users might burn a bigger hole in their wallets going into next year. With the telecom operators planning to introduce 5G services, companies are expected to hike their rates once again to keep revenues up, reported The Times of India. While 5G services are expected to increase the revenue coming to the companies, the auction for the 5G spectrum is expected to significantly increase expenditure as well.

Vodafone Idea and Bharti Airtel have already increased their rates earlier in the year. The move from two of the three major private telecom players in India was aimed at increasing the average revenue per user (ARPU), which they said will ease pressure on the telecom industry. The increase in tariffs ranged from Rs 10 to Rs 501 for both companies.

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With the sector still being plagued by debt despite government measures to alleviate the cash crunch, the telecom companies are expected to ask for affordable pricing for the upcoming spectrum allocation. The telecom industry as a whole is expected to have a total debt of Rs 4.7 crore as of March, 2022, according to ICRA.

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Telecom companies are expected to increase their prices so that the average revenue per user (ARPU) can increase to Rs 200, and then ultimately to Rs 300 for the long-term health of the sector. At present, the ARPU for Airtel stands at Rs 153 and at Rs 109 for Vodafone Idea.

Currently, all three major telecom companies are undertaking 5G trials, with testing sites being located in cities like Gurgaon, Bangalore, Mumbai, Kolkata, Chandigarh, Delhi, Jamnagar, Ahmedabad, Chennai, Hyderabad, Lucknow, Pune. and Gandhi Nagar. The 5G service is expected to be launched in metros and major cities first before being slowly expanded to other regions in the country.

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(Edited by : Shoma Bhattacharjee)