After reporting one of its biggest losses in the Indian telecom sector, Airtel and Vodafone Idea Limited on Monday have officially stated that its users will soon have to start paying more for their mobile plans.
This change comes into effect from December 2019, and it is likely that the telcos will be reaching out to its userbase across the country and informing them about the changes about to take place in the coming weeks.
The telco, along with Airtel has been riddled with a mounting pile of debt, now amounting to over Rs 70,000 crore, which includes the Adjusted Gross Revenue (AGR) dues which was ordered in the recent Supreme Court ruling.
Without mentioning how much more users will have to cough up for monthly bills with the hike in tariff, Vodafone Idea through its statement, “reiterated its commitment to play its due role in realising the vision of Digital India by continuing to provide seamless mobile services to customers across India.”
Airtel in its statement said this: “The telecom sector is highly capital intensive with fast changing technology cycles that require continuing investments. It is, therefore, extremely important that the industry remains viable to support the vision of Digital India. Accordingly, Airtel will appropriately increase price offerings in the month beginning December.”
So, it seems that Vodafone Idea as well as Airtel have finally accepted that competing with the likes of Airtel and Reliance Jio in the current environment may not be suitable for their long-term operations in the country. And Vodafone even mentioned this in its official statement, shared with the media on Monday evening.
The acute financial stress in the telecom sector has been acknowledged by all stakeholders and a high level Committee of Secretaries (CoS) headed by the Cabinet Secretary is looking into providing appropriate relief. To ensure that its customers continue to enjoy world class digital experiences, Vodafone Idea will suitably increase the prices of its tariffs effective 1 December 2019.Vodafone Idea statement
This development also comes at a time, when the country is nearing the deadline after which Interconnectivity Usage Charges (IUC) for telcos are expected to be abolished, depriving the likes of Airtel and Vodafone Idea of more avenues to make money.
The tariff hike might not please mobile users in the country, especially when they have become used to paying one of the cheapest data rates in the world.
It’ll be interesting to see how much do these telcos increase their tariffs, and if there’s a possibility of users expected to pay for making voice calls again. All this could invariably benefit Jio, who might see more users joining its network in the coming months.
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