Bharti Airtel and Vodafone-Idea are reportedly considering a new round of tariff hikes as early as September, according to ‘exclusive sources’ who spoke anonymously to CNBC-TV18. According to the report, both the telecom operators are considering an increase of up to 10 percent in the prices of select data and calling plans, and the same may be implemented by September or October 2020. The hike in tariff may be a result of the massive adjusted gross revenue (AGR) dues that the government of India imposed on telcos in India, following a prolonged battle in court on the matter.
Airtel and Vodafone-Idea have already undertaken price hikes after the initial court ruling on AGR dues was announced. A fresh appeal by the telcos at the Supreme Court of India is expected to be ruled upon at 3PM today, where a ruling bench led by Justice Arun Mishra is expected to announce their verdict on whether the telcos will be afforded any leniency on levying of the dues. However, reports suggest that the SC bench is unlikely to reconsider the ruling of the total amount of dues that have been charged to the telcos, and instead give a verdict on the proposed staggered payment timeline that the telcos have appealed for. Both Bharti Airtel and Vodafone-Idea have appealed for a 20-year period to pay the claimed dues, stating that the Department of Telecommunications, government of India has certain securities that would ensure that the telcos eventually do pay off their debts.
In 2019, all telecom operators in India had announced price hikes of between 10 to 40 percent across various plans. CNBC-TV18’s report claims that both the operators believe that the tariff hike will be inevitable and necessary in order to maintain revenue flow. However, the report also states that a Vodafone-Idea spokesperson termed the claim as “speculative and baseless”, while Bharti Airtel did not comment on the matter.
India is one of the most competitive markets for telecom plans, with the average cost of data in India going as low as around Rs 3 per GB. Most plans, both prepaid and postpaid, offered by the operators include unlimited calling as well as national roaming, and also offer some form of content subscription plans offered complimentary with the plans. With a cut-throat telecom market that is essentially a three-way race at the moment, it remains to be seen how the SC’s impending AGR ruling affects the telcos, and in turn their data prices, in the long run.