Tariffs Should Keep on Increasing to Address the Financial Distress in Telecom Industry: COAI

Over the last few weeks, there has been a long debate going on the internet regarding the latest tariff hike from telcos. Some say that the tariff hike is good for the industry, while some believe that it’s not at all a good move from the operators as they don’t have the capability to provide quality services. Rajan Mathews, the Director General at Cellular Operators Association of India (COAI), believes that the tariff hike should happen to address the financial stress in the industry. Furthermore, he also added that the tariffs would be raised to meet the Rs 200 ARPU. COAI, which represents the telecom operators, also approached Trai to establish a floor pricing for data and voice in the industry, so that the customers can choose their next operator based on the quality.

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COAI Waiting to See How New Tariff Plans Impact Customers

Reliance Jio entered the Indian telecom market at a time when incumbents like Bharti Airtel, Vodafone India, Idea Cellular and so on are enjoying a purple patch. ARPU of Airtel and Vodafone Idea used to be over Rs 200 and both the companies used to charge around Rs 250 for 1GB of 4G data. Reliance Jio changed this entirely with its cheap tariff plans and a majority of the customers inclined towards Jio because of the LTE-only network.

To compete with Jio and retain the market share, Airtel and Vodafone Idea came up with new tariff plans which almost matched Reliance Jio.

However, Airtel and Vodafone Idea will no longer be going after Reliance Jio as the telcos are facing several financial issues. There are even talks that Vodafone may exit the Indian market if there’s no relief from the government.

During an interaction with ET Now, Rajan Mathews said that the tariffs would be raised to achieve at least Rs 200 ARPU in the industry. “Yes, we have been saying that tariffs will have to be raised in the short term by at least Rs 200 ARPU and we are trying to get that discipline embedded in the industry,” he added.