Vodafone Idea, Bharti Airtel to raise mobile tariffs from Dec 1

Bharti Airtel said the Telecom Regulatory Authority of India (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.

Written by November 19, 2019 21:24

New Delhi: Crisis-ridden telecom majors Bharti Airtel and Vodafone Idea have announced a raise in tariffs from next month in a bid to make their businesses viable as the government works out a solution after the recent Supreme Court judgement on definition of adjusted gross revenue (AGR).

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Both operators reported a cumulative loss of Rs 74,000 crore in the July to September quarter of current financial year after making provisions for their liabilities.

Vodafone Idea said 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.

The Delhi High Court today dismissed the Centre's plea challenging Vodafone's move to initiate two international arbitrations against India in connection with a tax demand of 11,000 crore rupees under a retrospective law of 2012.

“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,” it said in a statement.

Bharti Airtel said the Telecom Regulatory Authority of India (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.

Bharti Airtel

“The sector is highly capital intensive with fast-changing tech cycles that require continuing investments. It is therefore extremely important that industry remains viable to support the vision of Digital India. Accordingly, the company will hike prices from December,” it said.

Neither of them quantified the hike.

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Airtel posted a substantial loss of Rs 23,045 crore in Q2 FY20. The numbers were dented by exceptional loss for license fee and spectrum usage charge especially after the unfavourable verdict from Supreme Court on AGR dues.

On the other hand, Vodafone posted a net loss of Rs 50,922 crore for the second quarter ended September, the highest ever net loss reported by a company in India.

Both companies say there is material uncertainty in the telecom sector after the Supreme Court verdict.