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The Telecom Price Hike.

Ok. Now Jio has joined the party with Airtel and Vi by increasing the mobile tariff price. Does this mean "party over" for customers?




While people are grieving the price hike, let's try to understand this from the market perspective. All companies operate for profit. They provide services and advertise them with a capitalistic mindset. Telecom prices always drop when new technology is being adopted and prices hike when it's being developed. You'll understand this if you take a look back. 2 major events changed the telecom industry in India. One was the 2G scam, back in 2008, which led to a mass cancellation of telecom licenses. The 2nd one is Reliance Jio's entry into the market in 2016. Since then, the cost of data has been relatively low until the 1st price hike in 2019. 

All companies intend to earn more average revenue per user (ARPU). It's important for them to pay off their debts and to invest in further expansion and projects. In today's scenario, it's 5G. As the world is adopting 5G at a rapid pace, Indian companies need to catch up. They require capital and for that and they should be either earned or borrowed. This price was coming; it's long-expected. The CoViD 19 pandemic has delayed this legitimate price-hike by almost 2 years. How long do you think you'll keep getting the "cheapest data" in the world? It'll mean a huge revenue loss for the telecoms. 

If the economic side is considered, it is believed that this price hike will contribute to a marginal hike in base inflation. We have to wait and see what awaits us. Fingers crossed.

Now coming to the question; Is it "party over" for the customers? Well, kind of. Of course, we can expect a marginal drop in price when 5G officially rolls out, but the tariffs are not expected to drop any further in the recent future. What customers can expect from the service providers is better quality. 

If you have been observing the market closely, Airtel announced its premium "ecosystem" service called "Airtel Black". It consolidates the bill for a family using say, airtel sim cards, DTH, fibre or any combination of their services. Companies have understood that as the variety in services grows, the "ecosystem" approach is what is going to retain their customers. Mind you, "customer retention" is an extremely important aspect of the success of any company. There's a reason why Apple Inc. is so much successful than its rivals. "Airtel Black" is seen as Bharti Airtel's first push towards an ecosystem. When Jio isn't explicitly showcasing a similar approach, if you are smart enough to grab the subtle traces that Jio has left along the way, like; integration of all its apps within the My Jio app, promoting Jio Mart discounts and many more; I see a bigger push towards building a whole ecosystem from scratch. Fingers crossed. I'm hopeful for the future. I'm optimistic that despite the price hike, the companies will strive to provide quality and satisfaction to their customers. 

**The reason I've used the word "ecosystem" so much is because of its importance in the tech world. It can demand a 5000-word separate blog to understand.**

Thank you for reading this.

Leave your thoughts and let me know what you think of this. 

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