- Other telcos have also announced tariff hikes
- The new burden on incumbent telcos comes after the Supreme Court AGR decision
- The telecom industry is under a new financial burden of Rs 1.4 lakh crore
The biggest change that the telecom industry is going through right now seems to be on the tariff front. To recall, this is the first time in the last three years after the data tariff war, that there have been official talks about raising of tariffs in the industry to improve its financial health. The first move was made by Vodafone Idea, which announced an increase in tariffs starting December 1. Following, next in line was Bharti Airtel which then joined in unison about the increase in tariffs. However, now we have Reliance Jio which has also noted in its latest release that it would increase the tariffs in the coming days. However, with this, Reliance Jio has taken a very neutral stance and noted that it would increase the tariff in such a way that it does not affect the data consumption or growth in digital adoption in any way, while also sustaining the investments.
Reliance Jio Rallies for Removal of 2G Network By Investment
Reliance Jio has noted in its latest release that it has enabled India as the world’s largest data-market growing from 20 crore GB per month in 2016 to over 600 crore GB per month now. It added, “Despite the staggering growth in data-consumption and 4G coverage across the country, there are still over 40 crore Indian consumers who have not benefitted 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. The Government and TRAI should mandate this through policy. This requires continued investment at an industry level. The whole industry needs to come up the curve and raise standards to meet the aspirations of Indian citizens and fulfil the nation’s digital agenda.”
Jio to Focus on Customer Service and Quality
The telecom operator also added that it is aware of the media reports which point to the fact that Trai could soon start a consultation process in the industry which would be focused on the revision of tariffs, especially in its increase. The Mukesh Ambani led telecom operator has also added that with a floor pricing on the way for the industry, it would compete on the basis of quality and service in the marketplace. It also said that being a customer-obsessed organisation it will provide the best services to its customers and would always keep them at the centre of everything to ensure that consumers get the most benefits.
Floor Tariff Pricing to Help Bharti Airtel and Vodafone Idea
It is worth noting that the move of bringing a floor pricing in the industry could be a rally of the Telecom Regulatory Authority of India (Trai) to help the telecom operators which seem to be stuck in a financially grim position especially after the Supreme Court decision on the matter of Adjusted Gross Revenue (AGR). For an industry which is already under a reeling debt of Rs 7 lakh crore, the telecom operators now have additional dues of Rs 1.4 lakh crore and possibly even more, as the Apex Court has changed the definition of AGR which increases the license fee and Spectrum Usage Charges (SUC) dues by a significant amount. The move of raising the tariffs as early as December would mean that the telecom operators would be better disposed to raising enough influx from revenue to provide well for the dues. It is worth noting that the telecom operators except Reliance Jio and BSNL have also asked for a three-year moratorium, extended payment deadlines and more from the government in the form of relief.
Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.