Vodafone Idea, Bharti Airtel May Not Get All the Help From Tariff Hike, Govt Might Need to Intervene

The three major telecom operators in the Indian telecom industry, including Reliance Jio, Vodafone Idea and Bharti Airtel have announced the upcoming tariff hike. In a time where the industry remains laden with massive dues, and there is a lot of pressure on Bharti Airtel and Vodafone Idea, the move of raising the tariffs come as no surprise. However, as per a new ET Telecom report on the matter, SBICap Securities has said according to one of its recent findings that additional help will be required from the government’s side even when the telecom operators decide to hike the tariff of their plans by 15%. What the analysts have implied is that a 15% tariff hike would be insufficient for the telecom operators to bring relief for the new burden of dues which has come upon them after the announcement of the new definition of AGR by the Supreme Court.

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15% Hike Not Enough for Telcos

It is worth noting that since the last few days, starting with Vodafone Idea, Bharti Airtel and then Reliance Jio have all announced tariff hike citing investments in networks as the reason for their move. Vodafone Idea has said that the new hiked tariffs in the industry will go effective on December 1. On the sidelines, the Mumbai based investment firm has commented that with Reliance Jio increasing taxes essentially by 14%, there is headroom for other telecom operators to increase their tariffs by 15% as well. To recall, earlier this year, the Mukesh Ambani led telecom operator has introduced the IUC charges for its customers which charge 6 paise per minute from the subscribers to make calls to other networks. This IUC charge adds up to 14% of the overall tariff, thus translating into a hike. Since Reliance Jio has already made this move, this will allow the other telecom operators to hike their tariffs as well.