Telecome companies are expected to announce new rate increases soon in order to boost their average revenue per user (Arpu) by filtering out low-paying, inactive consumers.

Despite the hikes implemented in December 2021, the active subscriber base of the industry has increased in the last several months, putting an end to prior fears about tariff spikes. Low-end consumers, who were largely inactive, meaning they had more than one or two connections, have been lost to the operators.

Reliance Jio, for example, has boosted the percentage of active subscribers on its network by weeding out idle customers, which reached an all-time high of 94 percent at the end of February.

Analysts in the telecom sector believe that the prognosis would remain positive even after another round of rate hikes, with Bharti Airtel focusing on boosting its Arpu and Jio leading the way in upgrading the profile of users on its network.

This year, Bharti Airtel wants to reach an Arpu of ‘200. At the end of December, the company reported an Arpu of Rs 163. Similarly, Vodafone Idea has been vociferous on raising the Arpu for the telecom industry, albeit it has not provided a particular figure.

The telecom industry has been losing cellular subscribers on a net basis for the past two months as a result of the rate hikes, but the active subscriber count has been increasing, indicating that paying consumers are increasing. This is taking place as telecom is considered as an essential service.

Another analyst stated that while the hikes may not occur in the near future because the impact of the previous round of hikes has not to be fully realised, telecom operators may consider hiking prices following the spectrum auctions in a few months as they seek to improve profitability. ‘If 5G is to succeed in the country, Arpu must ascend even higher.’ There is no commercial basis for any cell provider to put out 5G at the current levels of Arpu,’ according to an expert.