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NEW DELHI: Vodafone Idea Ltd has raised prices of two Red Family postpaid plans -- 598 and 749 -- by 50 with immediate effect, implementing the first round of the much-anticipated tariff hike.

The cash-strapped telco’s chief executive, Ravinder Takkar, in October had said the company will not shy away from raising prices and will set a precedent in the industry. The management of rival Bharti Airtel Ltd has also spoken of a tariff hike but not given a timeline yet.

Vi's plan of 598, which offers two connections with 80 GB data, will now cost 649, while the 749 plan will be offered at 799 per month. Both the plans will continue to offer unlimited local, STD, national roaming voice calls to any network within India.

In the 649 plan, primary users will get 50GB data and secondary users will have 30GB, while data in the 799 plan, which offers three connections, will be split as 60GB for primary connections and 30GB each for secondary users. Both the plans come with rollover of 200 GB data.

Other benefits of the family postpaid plans include Amazon Prime Video and Zee5 subscription for primary connections, and Vi Movies & TV subscription for both primary and secondary customers.

Postpaid users account for 8% of Vodafone Idea’s total subscribers, and the latest price hike in this segment is about 8% higher than that of Reliance Jio Infocomm Ltd, while it is similar to Bharti Airtel Ltd, said analysts at Motilal Oswal Financial Services in a note.

“This is the first leg of the price hike which is low hanging given that postpaid has sticky subscriber base and should likely see limited churn even if peers don't raise ARPUs (average revenue per user). This was evident in Reliance Jio's postpaid price cut in September 2020 which saw limited impact," said Motilal Oswal.

Vodafone Idea lost 1.2 million subscribers in August, which took the telco’s market share to 26.15%, according to Telecom Regulatory Authority of India.

Factors such as higher tariffs and deteriorating network quality will add to Vodafone Idea’s subscriber loss. Mint had on 24 November reported, citing analysts, that the Birla group company will need others to join in the tariff hike or risks losing more customers.


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