Telcos Say Tariff Hike Will Bring Better Customer Experience, Network Quality and New Tech

COAI has said that the revenue which will come as a result of the new tariff hike will be used to improve network technology

Highlights
  • COAI has also sent a letter to the Telecom Secretary
  • The association has said that customers will still pay less cost as compared to global average
  • The tariff hike will eventually help the subscribers in the form of better services

The news of tariff hike in the telecom industry has totally engulfed the sector, and everyone, including the companies and the subscribers are talking about it. However, there is also the talk about what will be the impact of the new tariff hike for the subscribers. In regards with this, the Cellular Operators Association of India (COAI) of India has said that the revenue which will be generated as a result of the tariff hike on these prepaid plans will be put back into improving customer service, network quality and new technologies. This new report comes from ET Telecom. It is worth noting that the Cellular Operators Association of India (COAI) represents the top telecom operators in India, including Bharti Airtel, Vodafone Idea and other gear manufacturers.

telcos-hike-network-technology-service

COAI Sends Letter to Telecom Secretary

As per the Director-General of COAI, Rajan Matthews, the customers have enjoyed very cheap tariffs for the last couple of years, but even with the new hike in the tariffs, the subscribers will be paying much less than what they were paying years ago. The COAI also sent a letter to telecom secretary Anshu Prakash, in which it said that the consumers will now be paying Rs 11 per GB of data which would be higher than the Rs 7.7 per GB price which they were paying until now. But, as compared to the extremely high cost of Rs 225 per GB in 2015 and Rs 333 per GB in 2010, it is very cheap. Also, not to forget that the data costs remain well below the global average of $8.5 per GB.

On the other hand, while the data costs have gone up a little, the ARPU has come down from Rs 141 in 2010 to Rs 118 in 2017 and further down to Rs 80. Regarding this COAI said, “We do not find the reported tariff increases to impact affordability negatively, as the majority of present customers were paying well in excess of this amount with substantially less consumption of voice minutes and data.”

Adding onto his statements, Rajan Matthews said that the industry would gain from the new revenue which would eventually translate to enhanced network for the subscribers, along with new technologies like Internet of Things (IoT) video streaming and more. As per Rajan Matthews, the more revenue for the telecom companies would mean that they would be able to hire more, and offer better services to the subscribers and thus get more capital from the creditors. This would also allow the operators to raise more money. As per Matthews, a 10% increase in broadband penetration would translate to 3-4% rise in the GDP.

Pressure on Telcos Because of AGR Issue

Matthews also remarked about the pressure from the Adjusted Gross Revenue (AGR) matter, which has put pressure of above Rs 1.3 lakh crore in the entire industry. This pressure is mostly to be borne by the two leading telecom operators in the country, which include Bharti Airtel and Vodafone Idea. These two telcos have to pay Rs 90,000 crore or more to the DoT in license fees and Spectrum dues after the new verdict from Supreme Court on October 24. After getting only a little relief from the government in the form of payment moratorium, the telecom operators have started to hike the tariffs of their prepaid plans as much as by 40%. Almost every telecom operator has hiked their tariffs in the past few days. While Vodafone Idea has launched its revamped portfolio today, Reliance Jio is all set to announce its increased plan pricing on December 6.

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.

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Arnab Jain
Arnab Jain

Paying more for better services like constant high speed internet, no call drops or distortion, better cell reception so that phone’s battery doesn’t dies very quickly, etc. wont hurt the majority. But all the carriers should think about all types of users. Not everyone has got a 4G phone or a need of internet. They should bring pocket friendly talk only plans for such users. Not much, give them 1000 minutes per month at roughly Rs. 100 with no other so called useless bells and whistles. Because right now people are looking at having to pay Rs. 150 for 1000… Read more »

SonuSB
SonuSB

I completely agree with Arnab. If some one need only few minutes of talktime as they are not using data or SMS then why should he/she need to recharge with such plans. TRAI should think over this and order operators to implement the same. And yes this validity strategy nowadays are so weird, it should of one complete month, a month doesn’t mean 4 weeks.

Girish Gowda | BengaLuru
Girish Gowda | BengaLuru

This 28 day validity has been there for over 5 years in Airtel. Nothing new. Now nobody will change.

karthik
karthik

Initially they had the culture of having 30 days. But when Government increases the Tax on Telecom use , they reduce d the validity instead of increasing the price. Prepaid prices are inclusive of Taxes , But as in postpaid we need to pay tax separately of the plan. Yes when tariff got increased they can keep the Tariff to 30 days by increasing it in some 7 %

Shownak
Shownak

Totally agree. What will a user of a feature phone do with data no matter howsoever cheap it is? And yes, please do keep the 2G network alive and that too at an affordable price. No data, no “unlimited” call.

Aretin
Aretin

Seems like even Jio has joined the telecom cartel. A unanimous 40% hike is unheard of. This is cartel behavior.

Arena
Arena

Jio plans are cheaper than rest.! Telecos running business with almost 8lac cr+ debt. They need some relief. If any teleco bankrupts then it’s loss on exchequer. It also signals 2x negatively on future investments.

I feel 10rs per day is reasonable charge for unlimited calls&3gb per day to put everything on track& move to 5G.

Average of 6rs-10rs per day per user turns good for telecos & for more investments.

Max
Max

Ji-A-Void

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