Vodafone Idea To Spearhead Tariff Hike: CEO

Vodafone Idea could spearhead tariff hike of data and voice services among all three major private telco companies in India. The company's CEO Ravinder Takkar on Friday said the company will not shy away from bringing a tariff hike and will in fact set an example for others to follow.

Takkar in a post-earnings call told analysts that current prices are unsustainable. The industry in the short term requires an average revenue per user or ARPU of Rs. 200 and Rs. 300 in due course, he added. "If you look at the current pricing, there is something wrong with it...We have said before that we will not shy away from hiking prices and we will be happy to be the first one to do so. We hope others in the industry will follow," Takkar said.

Earlier in the week, Bharti Airtel's CEO Gopal Vittal spoke on similar lines and said the industry can no longer run with the current pricing for voice and data services. Notably the last price hike was effected in December 2019.

Furthermore, the debt-ridden company's CEO said that the telecom regulator TRAI or Telecom Regulatory Authority of India is mulling setting up of a floor price for voice and data services. And in this regard the regulator recently met representatives of the three private telco majors including Airtel, Reliance Jio and Vodafone for discussing floor pricing such that overall financial health of the beleaguered industry can see an improvement.

Takkar said Vodafone Idea will continue its efforts on increasing its 4G customer base and provide a better user experience on the recently integrated network of the previous Vodafone Idea and Idea Cellular. The company's 4G users as of September 30 increased from 104.6 million in the preceding quarter to 106.1 million users.

The ARPU at the company also surged to Rs. 119 from Rs. 114 in the previous quarter and Rs. 107 in the year-ago period. This is even as the subscriber base at the company saw a decline from 279.8 million in three months to June to to 271.8 million as of September 30.

The company is largely confronting the AGR overhang and till now has cleared Rs. 7854 crore in AGR dues but still has to pay over Rs. 50000 crore to the department of telecommunications (DoT). Besides as per the statement by the company, it will not have the liability to pay annual installment before March 31, 2022. For now the telco will work on gaining customers' mindset and rationalize cost for incremental savings, said Takkar.

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