What is the story about?
What's Happening?
Reliance Jio and Bharti Airtel are facing scrutiny from Indian authorities over their decision to discontinue entry-level mobile plans. The Telecom Regulatory Authority of India is questioning the removal of these plans, which were aimed at low-income users. Jio has stopped online sales of a monthly prepaid plan priced at 249 Indian rupees, while Airtel has completely phased out its basic plan. Both companies argue that the shift is due to increased data consumption following the launch of 5G services. Jio's new entry-level plan offers 1.5GB per day for INR299, and Airtel offers 1GB per day for the same price. The move is seen as a strategy to improve average revenue per user (ARPU) ahead of Jio's planned IPO in 2026.
Why It's Important?
The discontinuation of entry-level plans by Jio and Airtel could have significant implications for low-income users who rely on affordable communication services. The decision reflects a broader trend in the telecom industry to capitalize on increased data consumption following the rollout of 5G networks. By improving ARPU, these companies aim to enhance profitability and attract investment, particularly in the lead-up to Jio's IPO. However, this strategy may also lead to increased financial strain on users who depend on cheaper plans, potentially widening the digital divide.
What's Next?
The Telecom Regulatory Authority of India may continue to press Jio and Airtel for explanations and possibly enforce regulations to ensure affordable communication remains accessible. As Jio prepares for its IPO, further tariff increases could be expected, influencing other telecom operators to follow suit. This could benefit financially struggling companies like Vodafone Idea, which may see improved profitability and investment attraction.
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