Vodafone Idea (VIL) and Bharti Airtel on Monday said that both companies will increase tariffs from December 1. This will be the first time since September 2016 when Reliance Jio launched its services that tariffs will be revised upwards by the telecom companies. However, both the companies did not say whether the tariff hike will be an increase in headline rates or realisations will improve by way of reducing the validity of pre-paid vouchers.
Currently, data rates for consumers at an average of Rs 8 per GB is the lowest in the world. The average revenue per user per month has declined from Rs 174 in FY15 to Rs 113 in FY19. A subscriber on an average uses 10 GB of data and 700 minutes of mobile talk time per month.
The tariff hike comes at a time when there's a talk that the government may advise Telecom Regulatory Authority of India (Trai) to initiate a process to put in place a minimum charge for voice and data services to ensure that the financial health of the telecom sector remains robust and viability is sustained.
In a statement, Bharti Airtel said: "We understand that Trai is likely to initiate a consultation for bringing rationality in pricing in the Indian mobile sector, which has been operating at prices that have been eroding the viability of the sector".
The two private telecom operators posted a combined loss of Rs 74,000 crore in the September quarter. VIL reported a Rs 50,922 crore loss for the second quarter ended September 2019-highest ever reported by an Indian company.
"To ensure that its customers continue to enjoy world class digital experiences, Vodafone Idea will suitably increase the prices of its tariffs effective December 1, 2019," VIL said in a statement. Bharti, however, hinted that it would continue to provide "affordable" tariffs to consumers.
Vodafone Idea reiterated that acute financial stress in the telecom sector had been acknowledged by all stakeholders, and a high level Committee of Secretaries (CoS) headed by the Cabinet Secretary was looking into providing appropriate relief. Speaking to analysts on Friday, VIL MD and CEO Ravinder Takkar had said that the company would like to see a moratorium over spectrum payments, reduction licence fees to help in the areas of GST blockage, as well as a few other things, which would reduce levies on the sector.
The company said that it was building on its spectrum footprint and by accelerating its network integration, it was expanding both its coverage and capacity and was on track to offer 4G services to 1 billion Indian citizens by March 2020. "VIL will continue to actively invest in making its network future-fit by embedding new age technologies and launching new products/services to cater to the evolving needs of its over 300 million customers," it said.