Tariff Rates Are Still Unsustainably Low: Vodafone Idea

Vodafone Idea on Monday said that the existing tariff prices in the telecom sector is “still unsustainably low” despite the operator along with its rivals increasing the tariffs in December 2019. The company highlighted the tariff rates in its annual report for the period ended March 31, 2020 that Vodafone Idea released on Monday. Vodafone Idea said that the operating environment remained challenging throughout the 2020 financial year largely due to the “unsustainable pricing and hyper competition.” Further, the company said that the adjusted gross revenue (AGR) verdict delivered by the Supreme Court “also added to the financial woes of telecom operators.”

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Telecom Tariffs Are “Still Very Low” Despite Tariff Hikes in December 2019

Kumar Mangalam Birla, chairman of Vodafone Idea, said in the letter to shareholders that the existing tariffs are “still very low” despite its hike in December 2019.

“Tariffs are still very low and therefore pricing revival is critical for the long-term growth of the sector,” Birla said.

However, Birla added that the increase in the content consumption is “driving strong data demand” and that it will provide a “significant opportunity” to all the industry operators when the “pricing revives.” Crucially, Birla said that the Vodafone Idea with its “largest spectrum portfolio” along with its network investments in the form of network sites and optical fiber is “very well positioned to be benefited in the evolving market place.”

Birla said that Vodafone Idea “continues to focus on driving 4G penetration to increase” average revenue per user (ARPU).