Vodafone Idea Says Will Raise Mobile Tariffs From December 1, 2019, in Light of Financial Stress

Vodafone Idea Limited (VIL) on Monday announced that from next month it will increase mobile tariffs, in light of the acute financial stress in the telecom sector. To recall, the Supreme Court late last month upheld a DoT demand that telcos clear their adjusted gross revenue (AGR) dues, a share of which has to be paid as licence and spectrum fee to exchequer. Following the order, both Bharti Airtel and Vodafone Idea last posted massive net losses while provisioning the payments of these dues.

In its press statement, Vodafone Idea said new, higher tariffs will go into effect from December 1, 2019. So far, the telco has not revealed by how much tariff prices will be raised. The company also 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." To recall, quashing rumours of its exit from the Indian market, Vodafone Idea CEO Ravinder Takkar last week said the government is clear that there would be no duopoly and it is in the process of filing a review petition.

"Mobile data charges in India are by far the cheapest in the world even as the demand for mobile data services continue to grow rapidly...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 Vodafone Idea press statement reads.

"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... VIL will continue to actively invest in making its network future-fit by embedding new age technologies and launching new products/services to cater to the evolving needs of its over 300 million customers," it added.

As we mentioned, Vodafone Idea and Bharti Airtel last week reported a whopping combined loss of nearly Rs. 74,000 crores in the September quarter as the leading telecom players were hit by statutory dues arising from a recent Supreme Court ruling. While Vodafone Idea posted a loss of Rs. 50,921 crores -- the highest-ever quarterly loss by any corporate in India -- Airtel reported loss to the tune of Rs. 23,045 crores. 

Vodafone has hinted at not being able to remain as a going concern if relief does not come for the sector. VIL said it is speedily expanding both its coverage and capacity and is well on track to offer 4G services to 1 billion Indian citizens by March 2020.