Bharti Airtel, Vodafone Idea To Hike Tariffs Amid Business Uncertainty

Bharti Airtel Ltd. and Vodafone Idea Ltd. announced plans to increase tariffs from next month, days after the Supreme Court ordered India’s struggling telecom operators to pay pending dues worth thousands of crores.

Vodafone Idea will “suitably” increase its tariffs from Dec. 1 to ensure that its customers continue to enjoy world-class digital experiences, the operator said in a statement. Mobile data charges in India are by far the cheapest in the world and “acute financial stress” in the telecom sector has been acknowledged by all stakeholders, it said

Bharti Airtel said it will appropriately increase price offerings as the sector was “highly capital intensive” with fast-changing technology cycles that require continuing investments. “We understand that TRAI [telecom regulator] 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.”

Both the firms did not disclose the quantum of increase in tariffs.

That comes as the government set up a committee of secretaries to suggest measures to mitigate financial stress in the sector locked in a tariff war ever since Mukesh Ambani, Asia’s richest man, launched Reliance Jio Infocomm Ltd. Last month, Supreme Court ruled that India’s telecom operators will have to include non-core revenue to calculate levies, adding more than Rs 50,000-crore burden on Bharti Airtel and Vodafone Idea.

Vodafone Idea, formed after the merger between Vodafone Group’s India unit and Kumar Mangalam Birla-controlled Idea Cellular Ltd., posted a net loss of Rs 50,922 crore in the July-September period—the largest-ever in the country’s corporate history. Bharti Airtel Ltd., too, reported a loss of Rs 23,045 crore as it provided for dues pending to the government. The company flagged concern about its ability to continue as a “going concern”.