The telecom war in India is likely to take a new turn as two major companies, Bharti Airtel and Vodafone Idea Ltd (VIL), have announced that they would increase the prices of their mobile services from December. While the companies have shied away from giving any details about the hike but it is likely that the rates of mobile data and calls would increase. Reliance Jio had already announced that it would charge 6 paise a minute for every call made to rival networks.
Mobile data charges in India are by far the cheapest in the world even as the demand for mobile data services continue to grow rapidly. In separate press notes, Airtel and Vodafone Idea have said that in order to cut losses, and to continue to invest in the digital infrastructure and maintain the quality standards of services, they will have to increase the rates of the services.
‘We understand that TRAI is likely to initiate a consultation for bringing rationality in pricing in the Indian mobile sector which has been operating at prices that have been eroding the viability of the sector. 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,’ Bharti Airtel said in a statement.
‘The acute financial stress in the telecom sector has been acknowledged by all stakeholders and a high level Committee of Secretaries (CoS) headed by the Cabinet Secretary is looking into providing appropriate relief. To ensure that its customers continue to enjoy world class digital experiences, Vodafone Idea will suitably increase the prices of its tariffs effective 1 December 2019. VIL will continue to actively invest in making its network future-fit by embedding new age technologies and launching new products/services to cater to the evolving needs of its over 300 million customers,’ VIL added.
According to analysts, there could be as much as 30-45 per cent increase ‘in the near term and up to three times the current rates over the next two years.’ With this, the struggling industry could generate a revenue of approximately $1.5-2 billion in a year's time. The news follows a Supreme Court directive according to which the telecom giants are to pay Rs 92,000 crore to the government.