New Delhi, Aug 17: As the Indian telecom operators plan to roll out 5G services as early as September-October on a pilot basis in select circles, millions of Indians who have 5G-capable smartphones are concerned if they will have to shell out more money to access ultra-fast speed and better connectivity.
Just like 3G and 4G, telcos will soon announce dedicated 5G tariff plans and according to industry experts, consumers may pay more to access the 5G services on their devices.
Reliance Jio, Airtel, and Vodafone Idea are currently tight-lipped, deliberating internally whether to opt for a substantial or a modest price hike for the end users, along with discussions on providing lucrative data bundling offers with smartphone makers when the 5G rollout takes a better shape, according to sources. However, the tariff plans will come down as usage increases, and more people embrace 5G networks, especially in Metros where the initial demand will come.
“I think the 5G tariff war will be there but surely not aggressive as we saw in 2016. Operators have repeatedly mentioned possible data price adjustments to boost average revenue per user (ARPU),” Tarun Pathak, Research Director, Counterpoint Research, told IANS.
An immediate tariff war with the launch of 5G is unlikely, but it “will be competitive as India continues to be a price-conscious market,” he mentioned.
A recent report by Nomura Global Markets Research estimated that telecom service providers would have two options either a modest 4 percent incremental tariff hike on their overall subscriber base or a 30 percent premium over 1.5 GB per day 4G plans.
“Historically, Indian telecom companies have refrained from charging a premium for 4G plans (vs 2G/3G data plans). With potentially higher speed on offer and likely initial uptake from premium customers (smartphones above Rs 15,000), there is a potential for telecom companies to charge a premium for 5G (vs 4G), in our view,” Nomura said in its report.
“5G tariff plans would be a key monitorable in the near term, and 5G premium (vs 4G) may provide the next leg of ARPU (average revenue per unit) uptick for the telecom companies,” it added.
Another report by Goldman Sachs Equity Research mentioned that 5G rollouts have not resulted in any “meaningful uptick in CAPEX for telecom companies globally, and it foresees a similar trend in India”.
