Vodafone Idea, Bharti Airtel and Jio announce increase in tariffs; three leading telecom players hike rates by up to 42%

  • On Sunday, three of the country's largest telecom operators, Vodafone Idea, Bharti Airtel and Reliance Jio, announced a hike in their tariffs

  • This news comes just weeks after Bharti Airtel and Vodafone posted historic losses on account of provisioning for the adjusted gross revenue dues

  • Reliance Jio on Sunday said it will launch new unlimited plans from 6 December, which will raise its voice and data tariff by up to 40 percent

On Sunday, three of the country's largest telecom operators — Vodafone Idea, Bharti Airtel and Jio — announced a hike in their tariffs.

This news comes just weeks after Bharti Airtel and Vodafone posted historic losses on account of provisioning for the adjusted gross revenue (AGR) pending dues and spectrum charges.

Vodafone Idea on Sunday announced new plans under which call and data charges will be dearer for its pre-paid customers by up to 42 percent from 3 December.  Besides this, Vodafone Idea will also charge 6 paise per minute for every outgoing call made by customers on to the network of other operators.

 Vodafone Idea, Bharti Airtel and Jio announce increase in tariffs; three leading telecom players hike rates by up to 42%

Representational image. Reuters

"Vodafone Idea Limited (VIL), India's leading telecom service provider, today announced new tariffs/plans for its prepaid products and services. New plans will be available across India starting 00:00 hours of 3 December 2019," the company said in a statement. The company has announced new plans in "unlimited"category with 2 days, 28 days, 84 days, 365 days validity which on the back of the envelope calculations show are costlier by up to 41.2 percent.

Vodafone Idea has only revised rates of plan promising unlimited mobile and data services and also introduced some new plans. A company official explained all the existing plans in unlimited category will be replaced by the new plans from 3 December and new plans will be introduced or revised based on market response. Though the company classifies a set of plans in 'unlimited' category, these actually come with usage limit for data at a promised speed and 100 SMS per day limit. The highest rate of increase of 41.2 percent has been announced by the company in annual unlimited category plan which will cost Rs 2,399 instead of 1,699 at present.

The starting plan with data offering of 1.5 Gb per day with 84 days validity in "unlimited" category will cost around 31 per cent more at Rs 599 compared to Rs 458 at present. The company will raise the price of Rs 199 unlimited plan, which offers 1.5 Gb data per day, by about 25 percent to Rs 249. Vodafone Idea which is reeling under massive debt of around Rs 1.17 lakh crore had earlier cited acute financial stress on the company behind the decision to raise mobile call and data charges.

Vodafone Idea last month reported a consolidated loss of Rs 50,921 crore — the highest ever loss posted by any Indian corporate — for the September quarter on account of liability arising out of the Supreme Court's order in the adjusted gross revenue (AGR) case. The company has estimated liability of Rs 44,150 crore post the apex court order, and made provisioning of Rs 25,680 crore in the second quarter this fiscal.

Bharti Airtel follows suit

Meanwhile, Bharti Airtel announced new plans under which call and data charges will be dearer for its pre-paid customers by up to 42 percent from 3 December. The development came a few hours after Vodafone Idea announced plans to raise mobile rates on similar lines. Increase in tariff announced by Bharti Airtel, however, are marginally lower compared to new rates announced by Vodafone Idea.

"Airtel's new plans, represent tariff increases in the range of a mere 50 paise per day to Rs 2.85 per day and offer generous data and calling benefits. These tariffs will be applicable from Tuesday, December 3, 2019," the company said in a statement. It has announced new plans in "unlimited"category with 2 days, 28 days, 84 days, 365 days validity, which on the back of the envelope calculations show higher price of up to 41.14 percent.

The new pricing represents a very modest increase. The effective revision in today's context is equal to what a customer would pay for a cup of tea in week on a road side stall, a company official who did not wish to be named said. Customers of both Bharti Airtel and Vodafone Idea will have to pay a minimum of Rs 49 to stay connected for about a month after 3 December.

Like Vodafone Idea, Bharti Airtel has also capped outgoing calls that can be made on to network of other telecom operator to 1,000 minutes in case of plans with 28 days validity, 3,000 in 84 days validity plans and 12,000 in 365 days validity plan. Beyond this limit, customer will need to pay 6 paisa per minute for outgoing calls. Highest rate increase of 41.14 percent has been announced by the company in annual unlimited category plan which will cost Rs 2,398 instead of 1,699 at present. The starting plan with data offering of 1.5 Gb per day with 84 days validity in "unlimited" category will cost around 31 per cent more at Rs 598 compared to Rs 458 at present.

The company will raise the price of Rs 199 unlimited plan, which offers 1.5 Gb data per day, by about 25 percent to Rs 248. The move from both the companies follows the Supreme Court judgement on adjusted gross revenue. Bharti Airtel has posted a staggering Rs 23,045 crore net loss for the second quarter ending 30 September, due to provisioning of Rs 28,450 crore in the aftermath of the SC ruling on statutory dues.

According to government data, the liabilities in the case of Bharti Airtel add up to nearly Rs 35,586 crore, of which Rs 21,682 crore is licence fee and another Rs 13,904.01 crore is the SUC dues (excluding the dues of Telenor and Tata Teleservices). The government is currently not considering any proposal on waiver of penalties and interest on outstanding licence fee based on adjusted gross revenue (AGR), or on extending the timelines for telecom companies to pay up their statutory dues.

Jio joins fray

Jio on Sunday said it will launch new unlimited plans from 6 December, which will raise its voice and data tariff by up to 40 percent. The Mukesh Ambani-led company, however, said that customers will get up to 300 percent more benefits under the new plans and it will offer fair usage policy for outgoing calls from its subscribers on the network of other telecom operators.

"Jio will be introducing new all-in-one plans with unlimited voice and data. These plans will have a fair usage policy for calls to other mobile networks. The new plans will be effective from 6th December 2019," the company said in a statement. Jio said it will continue to work with the government on the consultation process for revision of telecom tariffs and looks forward to participation from all other stakeholders.

With inputs from PTI

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Firstpost

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Updated Date: Dec 02, 2019 07:24:17 IST


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