Telecommunication services majors Bharti Airtel, Vodafone Idea and Reliance Jio on Sunday announced up to 40% increase in tariffs. This is the first rate hike in around five years, reported The Indian Express. The move is expected to affect around 90 crore customers from this month onwards.
“Airtel’s new plans represent tariff increases in the range of a mere 50 paise per day to Rs 2.85 per day and offer generous data and calling benefits,” a statement by the company said. The new mobile plans “offer tremendous value to our customers and are backed by a superior network experience on Airtel’s nationwide 4G network”, Bharti Airtel Chief Marketing Officer Shashwat Sharma told The Hindu.
Vodafone and Airtel both announced new prepaid plans with options for validity of two days, 28 days, 84 days and 365 days in a price range of Rs 19 to Rs 2,399. They will be valid from Tuesday.
Jio has not yet announced its plans. “Jio will be introducing new ‘all-in-one’ plans with unlimited voice and data,” a statement from Jio said. “These plans will have a fair usage policy for calls to other mobile networks. The new plans will be effective from 6th December 2019. Although, the new ‘all-in-one’ plans will be priced upto 40% higher, staying true to its promise of being ‘customer-first’, Jio customers will get up to 300% more benefits.”
Last month, all three telecom companies announced that they would increase tariffs. The decision to revise the rates came in the face of two of the companies posting historic losses for the second quarter of 2019-’20: Rs 50,922 crore for Vodafone Idea and Rs 23,045 crore for Bharti Airtel. Vodafone Idea’s loss was the biggest in the history of India Inc.
While the expected tariff hikes were around 15% to 20%, the revised rates signal “the return of pragmatism and sensibility” in the industry, analysts told The Indian Express.
The firms posted huge quarterly losses because of an adverse Supreme Court judgement last month that upheld the Centre’s broader definition of revenue. The government calculates levies on telecom operators on the basis of this definition. In its order, the top court excluded revenue from non-core telecom operations such as rent, dividend and interest income in the reporting of financial results. The court rejected the definition of adjusted gross revenue proposed by telecom operators.
The financially-stressed telecom sector got some relief when the Cabinet Committee on Economic Affairs deferred spectrum auction payments for two years till 2022. However, the companies will have to pay applicable interest on the deferred spectrum payments. Telecom operators owe the government nearly Rs. 1.47 lakh crore in licence fee and spectrum usage charges.
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