Vodafone-Idea and Airtel, which had reported record losses in July-September ’19-20 quarter, said that the increase in tariffs will help them “remain viable”, while giving them elbow room to invest for network and technology expansion.
“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,” Airtel said in a statement as it made a case for increased consumer tariffs. “Accordingly, Airtel will appropriately increase price offerings in the month beginning December.”
Vodafone-Idea, which last week shocked India Inc with a record quarterly loss of nearly Rs 51,000 crore, said there is “acute financial stress” in the telecom sector, which has been acknowledged by all stakeholders. “To ensure that customers continue to enjoy world-class digital experiences, Vodafone-Idea will suitably increase prices of its tariffs effective December 1,” the company said in a statement.
The minimum pre-paid tariff plan for Bharti Airtel starts at Rs 23 (for 28-day validity), while a monthly postpaid plan starts at Rs 399. For Vodafone-Idea, the lowest pre-paid plan starts at Rs 35, while the post-paid plan begins at Rs 399 per month.
Both Airtel and Vodafone-Idea are passing through heavy losses after the aggressive launch of services by Jio. Their position further deteriorated with the October 24 Adjusted Gross Revenue (AGR) judgment by the Supreme Court that ordered them to pay nearly Rs 50,000 crore in dues within three months.
Airtel carries a debt of Rs 1.16 lakh crore and has been ordered to pay Rs 21,682 crore in licence fee outstanding by SC. For Vodafone-Idea the fresh demand from the government is Rs 28,309 crore. The company has a debt of Rs 1.2 lakh crore.