Beleaguered wireless operator Vodafone Idea said it will “suitably” increase the prices of its tariffs from December 1 2019, pointing to the financial stress in telecom and stressing that mobile data charges in India are by far the cheapest in the world.
"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," the company said in a statement on Monday."
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."
The company has not revealed the quantum of the price hike.
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 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.
Last week, Vodafone Idea reported a net loss of Rs 50,921 crore for the second quarter ended September 2019. This is the highest ever quarterly loss posted by any Indian company in recent memory.
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 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 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.
CEO Ravinder Takkar, on November 15, said, "We have been engaged with the government very positively even before the AGR case. Their response has been very constructive,” he said, adding, “Government is aware of the tremendous stress faced by operators. They want the sector to be healthy and thriving and believe that it is an important contributor to the country. Government is clear that they want to see 3 private players and 1 public players in the sector.”