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Airtel and Vodafone-Idea to increase prices to cope with losses
India's leading telecom service providers Vodafone-Idea and Bharti Airtel have bumped up tariffs starting next month to cope with their losses.
NEW DELHI: India's leading telecom service providers Vodafone-Idea and Bharti Airtel have bumped up tariffs starting next month to cope with their losses. Over 60 crore mobile users both in pre-paid and post-paid categories will be affected by the price hikes. The move has been taken to cope with losses, government dues and increasing debt. Speculations suggest that the hikes may vary between 5% and 10% though an official statement has not been made by either of the service providers.
Vodafone-Idea and Airtel, reported record losses in July-September '19-20 quarter. They said the increase in tariffs will help them "remain viable".
In a statement addressing the price hike, Airtel said, "The telecom sector is highly capital intensive with fast changing technology cycles that require continuing investments. It is, therefore, extremely important that the industry remains viable to support the vision of Digital India. Accordingly, Airtel will appropriately increase price offerings in the month beginning December."
Vodafone-Idea, recorded a shocking quarterly loss of nearly Rs 51,000 crore last week. They said there is "acute financial stress" in the telecom sector. "To ensure that customers continue to enjoy world-class digital experiences, Vodafone-Idea will suitably increase prices of its tariffs effective December 1," the company said in a statement.
With Jio launching its services in the market aggressively, business has affected both Airtel and Vodafone-Idea. The situation deteriorated further with the October 24 Adjusted Gross Revenue (AGR) judgment by the Supreme Court which ordered them to pay nearly Rs 50,000 crore in dues within three months. Airtel and Vodafone carry a debt of Rs 1.16 lakh crore and Rs 1.2 lakh crore.respectively.
