Reliance Jio joins Airtel, Vodafone Idea in plans to raise mobile tariffs

NEW DELHI: Reliance Jio, the country’s largest telecom operator, followed rivals Bharti Airtel and Vodafone Idea in plans to raise consumer tariffs, saying the move is necessitated by the need to make fresh network and technology investments.When it happens, it will be the first significant tariff increase by the new telecom operator which had disrupted the financials of the mobile industry through its aggressive plans after launching services in September 2016.
Telecom tariffs for over 60 cr mobile customers will go up from next month with Vodafone-Idea and Bharti Airtel deciding to increase rates in view of losses, govt dues & mounting debt. Airtel carries a debt of Rs 1.16 lakh cr & has been ordered to pay Rs 21,682 cr in licence fee outstanding by SC. For Vodafone-Idea the debt is Rs 1.2 lakh cr and it has to pay Rs 28,309 cr.

Jio, however, said that the tariff hike will be done “in a manner that does not adversely impact data consumption or growth in digital adoption and sustains investments.”

The company said it plans to compete with rivals on the basis of quality and service in the marketplace. “Jio will always keep the customer at the center of everything and ensure that the customer continues to benefit the most.”

The company said it will work aggressively on shifting 2G customers to a 4G eco-system so that data-driven benefits can be accessed by all. “…there are still over 40 crore Indian consumers who have not benefited from the advent of the latest technologies. We believe that the ambitious objectives of the ‘Digital India’ mission can be achieved only if India is made “2G-mukt” in the shortest time-frame possible… This requires continued investment at an industry level.”

On Monday, Vodafone Idea and Airtel had said that they will increase tariffs in view of their unprecedented losses and heavy government dues and mounting debt.

Vodafone Idea and Airtel, which had reported record losses in the just ended July-September 2019-20 quarter, said that the increase in tariffs will help them “remain viable” while giving them elbow room to invest for network and technology expansion.

Vodafone Idea, Bharti Airtel shares zoom on rate hike move

Shares of Vodafone Idea and Bharti Airtel were in heavy demand on Tuesday, with the former rising sharply by up to 35 per cent after both the companies announced a hike in mobile phone call and data charges from December. The company’s scrip zoomed 34.68 per cent to close at Rs 6.02 on the BSE. During the day, it advanced 42.95 per cent to Rs 6.39.

“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,” Airtel said in a statement as it made a case for increased consumer tariffs. “Accordingly, Airtel will appropriately increase price offerings in the month beginning December.”

Vodafone Idea, which last week shocked India Inc with a record quarterly loss of nearly Rs 51,000 crore, said that there is “acute financial stress” in the telecom sector which has also been acknowledged by all stakeholders.

“To ensure that customers continue to enjoy world-class digital experiences, Vodafone Idea will suitably increase the prices of its tariffs effective December 1,” the company said in a statement released towards the evening.



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