Reliance Jio takes cues from rivals, to hike tariff in few weeks
BusinessToday.In November 19, 2019
Reliance Jio has revealed plans to increase tariffs as TRAI prepares to launch a consultation process to revise telecom rates. This comes close on the heels of separate announcements from Vodafone Idea and Bharti Airtel, where they said they will hike tariffs from December 1. The tariff hikes are expected to help increase revenues, augment ARPUs and fund investments in 4G and 5G infrastructure.
"As per media reports, we understand that TRAI is likely to initiate a consultation process for revision of telecom tariffs. Like other operators, we will also work with the government and comply with the regulatory regime to strengthen the industry to benefit Indian consumers and take measures including appropriate increase in tariffs in next few weeks in a manner that does not adversely impact data consumption or growth in digital adoption and sustains investments," Reliance Jio said in a regulatory filing on Tuesday.
Last month, the Mukesh Ambani-led telecom operator had also imposed a 6 paise charge on outgoing calls to other operators to offset expenses due to interconnection charges.
A day before Reliance Jio's announcement, Vodafone Idea and Bharti Airtel had said in separate that they will increase tariffs from December 1 in light of acute financial crisis and to keep the telecom sector viable. Presently, the incumbent telecom operators are looking at a Rs 92,641 crore payout to Department of Telecommunications (DoT) following a Supreme Court order on the definition of adjusted gross revenue (AGR).
In the September quarter of this fiscal, Vodafone Idea and Bharti Airtel reported a cumulative loss of almost Rs 74,000 crore between them. These two companies also account for the two highest losses in the quarter ended September 30, 2019. Bharti Airtel reported a loss of Rs 23,045 crore, whereas Vodafone Idea saw losses balloon to Rs 53,921 crore due to provisioning for AGR payout to Department of Telecommunications (DoT).