Vodafone Idea is reportedly looking to increase tariffs by 15-20% by the end of the year or early next year. The operator is attempting to maintain the balance between making a financial recovery and bearing losses from customers.
A new report by ET Telecom says Bharti Airtel may follow but both will closely watch rival Reliance Jio’s moves and calibrate their rates accordingly.
“The company is likely to increase tariffs even as telcos wait for the regulator to fix floor prices,” ET quoted familiar person. The other person said Vi could hike rates as early as in December. They also claimed that there are internal talk of raising tariffs by as much as 25%, the people said that may be difficult to implement at one go.
In December 2019, country’s three private telcos increased rates in December 2019 for the first time after the entry of Reliance Jio Infocomm in 2016. However, Vi’s average revenue per user (ARPU) of Rs 119 at the end of the September quarter still lags that of Bharti Airtel (Rs 162) and Jio (Rs 145).
Vi MD Ravinder Takkar had earlier said that the present tariff rates are “unsustainable” and it would not “shy away” from being the first to increase them.
“Ongoing consultations around floor price (for data rates) doesn’t stop anyone from hiking tariffs, but the timing has to be right, but we can assure you that the tariff hike decision is not far away,” Takkar told analysts after the second-quarter results. Bharti Airtel CEO Gopal Vittal has said that while it will not be the first operator to raise prices, it will instantly follow its peers, as it also agrees that current rates are unsustainable.
However, it is still not clear if Jio will hike the tariffs as well. In the July-September quarter, Jio added 7 million subscribers compared with Airtel’s 14 million. Vi lost 8 million users. as per ET report.