The tariff hike by the three telecom operators is the first of its kind in more than a decade after years of competition ensured prices of calls and data services hit rock bottom
Vodafone Idea and Bharti Airtel, reeling under debt, posted record losses in the September quarter
New Delhi: All three private telecom operators in the country, Vodafone Idea Ltd, Bharti Airtel Ltd and Reliance Jio Infocomm Ltd, said they will raise prices of their prepaid voice and data services, ending a protracted tariff war that dragged rates to the lowest in the world.
The increases in most plans announced by the three operators on Sunday evening are in the range of 15-47%. While the new tariffs for Vodafone Idea and Bharti Airtel will be effective starting Tuesday, Reliance Jio’s revised tariffs will come into effect on 6 December.
The tariff hike by the three operators isthe first of its kind in more than a decade after years of competition ensured prices of calls and data services hit rock bottom.
The entry of Reliance Jio in September 2016 intensified the price war, triggering an industry-wide consolidation that left only three private telcos and caused record losses at Vodafone Idea Ltd and Bharti Airtel Ltd.
An adverse Supreme Court ruling and mounting losses prompted Vodafone Group Plc’s chief executive, Nick Read, to seek the Indian government’s intervention for saving the company’s local affiliate from heading towards bankruptcy.
Around a fortnight back, the three operators said they would raise prices, although it isn’t still clear whether the government nudged them to do so.
“Airtel’s new plans represent tariff increases in the range of a mere 50 paise per day to ₹2.85 per day and offer generous data and calling benefits," the company said in a statement on Sunday.
Airtel has merged its popular ₹169 and ₹199 plans into a single ₹248 pack. Their previous 28-day validity remains the same. The tariff hike for users of its ₹169 pack comes to be 47%, although customers will now get 1.5GB of data per day, 50% more from what they were getting earlier and the same as what the ₹199 plan user was enjoying.
Vodafone Idea also announced new plans for prepaid products and services with validity periods of 2 days, 28 days, 84 days and 365 days.
Reliance Jio said it will launch “all in one" plans which, though 40% costlier, will offer 300% more benefits.
Vodafone Idea and Bharti Airtel, already reeling under heavy debt, posted record losses in the September quarter because of the unfavourable Supreme Court verdict that upheld the government’s broader definition of revenue on which it calculates levies on telecom operators.
Vodafone Idea’s loss for the September quarter widened to ₹50,922 crore from ₹4,874 crore in the year earlier, as it set aside money to pay dues to the government. Rival Bharti Airtel swung to a ₹23,045 crore loss in the quarter from a profit of ₹118 crore in the year earlier.
On 24 October, the Supreme Court directed telcos to pay at least ₹92,000 crore in past dues to the government within three months. Bharti Airtel and Vodafone Idea, along with two others, have filed a plea in the Supreme Court to review the verdict.
According to government data, the liabilities in the case of Bharti Airtel add up to nearly ₹35,586 crore, of which ₹21,682 crore is licence fee and another ₹13,904.01 crore is spectrum dues (excluding the dues of Telenor and Tata Teleservices, the companies that it acquired).
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