A day after the spectrum auctions, Reliance Jio has taken the lead in hiking mobile services tariff. On Thursday, Reliance Jio announced 12.5-25 per cent tariff hikes across most of its plans.

Tariff hikes across the telecom industry were expected after the elections as operators look to ramp up their revenues to tide over mounting debt. Vodafone Idea and Bharti Airtel are also expected to announce their plans to raise tariffs soon

Jio’s lowest plan at ₹155 a month for 2 GB data saw a 20 per cent hike, while on the high-end the tariff went up by 12.5 per cent. This could dampen consumer demand particularly for the people on the economic margins as their demand is not necessarily elastic.

Consumer goods expert Abneesh Roy from Nuvama Institutional Equities believes that a tariff hike will have a cascading dampening effect on FMCG demand in general.

“Potentially these hikes could be negative for staples companies as consumption at the lower end in both rural and urban India, could get impacted negatively as wallet share shifts to communication,” he said.

Also read: Spectrum auctions end with muted bidding amid strategy shift by telcos

Akash Ambani, Chairman, Reliance Jio Infocomm Limited, said, “The introduction of new plans is a step in the direction of furthering industry innovation and driving sustainable growth through investments in 5G and AI technology. Ubiquitous, high-quality, affordable internet is the backbone of Digital India and Jio takes pride in contributing to this. Jio will always put our country and customer first and will continue to invest for India.”

Despite claiming to have a pan India 5G network, Jio did not include a differentially priced 5G plan. Noting that unlimited 5G will be automatically available on all 2GB/day and above plans. With no distinct use-cases for 5G there is no distinct consumer demand for 5G-only plans yet.

Jio also introduced new services including JioSafe - Quantum-secure communication app for calling, messaging, file transfer and more (priced at ₹199 per month); and JioTranslate - AI-powered multi-lingual communication app for translating voice call, voice message, text and image (priced at ₹99 per month).

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