Hours after Vodafone Idea announced a hike in tariffs from December, Bharti Airtel has followed suit.The company has reasoned that the Indian telecom space needs price rationality and that they expect the telecom regulator to bring out a consultation paper on this soon.
Hours after Vodafone Idea announced a hike in tariffs from December, Bharti Airtel has followed suit.
The company has reasoned that the Indian telecom space needs price rationality and that they expect the telecom regulator to bring out a consultation paper on this soon.
In a press release, the company states, "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."
Bharti Airtel has not revealed the quantum of the increase. However, the company has argued that the sector is a capital intensive one as it requires constant investments because of fast-changing technology.
"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," the statement reads.
On November 15, CNBC-TV18 reported the committee of secretaries (CoS) plan to set a minimum price for mobile calls and data. Sources confirmed the committee has sought recommendations from the Department of Telecom (DoT) on setting a minimum charge for all tariffs for telecom players and also assessing the impact it will have on telecom operators.
Airtel, Vodafone Idea and other telecom operators have to pay the government a whopping Rs 1.4 lakh crore following the recent Supreme Court order that has sent shock waves through the industry which is already grappling with losses and billions of dollars in debt.
The Supreme Court, last month, upheld the government's position on including revenue from non-telecommunication businesses in calculating the annual Adjusted Gross Revenue (AGR) of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.
As per the latest estimates by the telecom department, Bharti Airtel faces a liability of around Rs 62,187 crore (including share of Tata Group of companies and Telenor India), while Vodafone Idea may have to pay about Rs 54,184 crore. The remaining liability is with state-owned BSNL/MTNL and some of the shut/bankrupt telecom companies.