Following on the footsteps of Vodafone, Airtel plans to hike the price of its prepaid and postpaid plans. The Sunil Mittal-led company plans to increase the prices of its services from December. Vodafone Idea said that it will raise prices of its services from December 1. If you are an Airtel or Vodafone customer then prepare yourself to shell more for mobile services. The price hike will be implemented for both prepaid as well as postpaid subscribers.
Airtel to hike tariff in December
After the tariff war started by Reliance Jio in 2016, the telecom service providers had to go through a phase of competitive pricing. Reliance Jio broke that spell when it raised tariffs by introducing interconnect charges for calls to other networks. While Vodafone Idea and Airtel tried to cash in by not increasing the price, they have now succumbed to market scenario. Bharti Airtel is the second largest telecom service provider in the country while Vodafone Idea has dropped to third in the market.
“Airtel will increase price offerings in the month beginning December,” an Airtel spokesperson said. “While continuing to provide affordable tariffs to customers, it would balance the needs of the company to remain viable and thereby continue to invest in the much needed digital infrastructure and maintain the quality standards required by our customers.”
The price hike from both Airtel and Vodafone Idea Ltd is indicative of the sector situation. “The telecom sector is highly capital intensive with fast changing technology cycles that require continuing investments,” Airtel said. Both the companies recently announced huge loss in their India operations. The loss is primarily caused by the AGR payment. Vodafone, in fact, is looking to exit the India market altogether. Nick Read, Chief Executive of Vodafone, said the country has become challenging for the company.
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Read told media that the company has asked the government for a relief package comprising of a “two-year moratorium on spectrum payments.” Both the companies have to collectively pay nearly Rs 80,000 crore as per an order from the Supreme Court. Airtel and Vodafone Idea Ltd have asked the government to change the terms and conditions for the payment of AGR dues. However, the government has not made any public announcement around these terms. For the time being, the viability of continued operations without price hike looks difficult for both the companies.