Vodafone Idea CEO Confirms Another Price Hike in 2022 or 2023

Vodafone Idea’s subscriber churn rate is very high at the moment. According to the performance report released by the telco for Q3 FY22, the subscriber churn rate stood at 3.4% compared to the 2.9% in Q2 FY22.

Highlights

  • It hasn’t been long since the private telecom operators introduced prepaid tariff hikes for the customers across the nation.
  • Vodafone Idea needs funds to invest in its networks.
  • Motilal Oswal has already said that Vodafone Idea needs another round of tariff hikes for increasing the ARPU by 1.9x.

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Vodafone Idea

It hasn’t been long since the private telecom operators introduced prepaid tariff hikes for customers across the nation. Vodafone Idea (Vi) is planning to go for another round of prepaid tariff hikes in 2022 or 2023, Ravinder Takkar, CEO of Vodafone Idea, said during the earnings call. The Rs 99 prepaid plan from the company is not an expensive option for 4G users believes the company. Depending on the market reaction and how well the current new prices are embedding, the telco will take a call on whether another prepaid tariff hike for 4G plans will come in 2022 or 2023.

Vodafone Idea (Vi) Subscriber Churn Rate Very High

Vodafone Idea’s subscriber churn rate is very high at the moment. According to the performance report released by the telco for Q3 FY22, the subscriber churn rate stood at 3.4% compared to the 2.9% in Q2 FY22. The figure should be similar in the Q4 FY22 as Vodafone Idea doesn’t have the necessary means to match the capex levels of Reliance Jio and Bharti Airtel for 4G networks and services.

The tariff hikes have helped the company with increasing average revenue per user (ARPU) from Rs 109 in Q2 FY22 to Rs 115 in Q3 FY22, but the subscribers are going out of the telco’s networks very fast.

Vodafone Idea (Vi) needs funds to invest in its networks. For that, the telco has already been talking with potential investors and the promoters are also expected to invest some money in the foreseeable future.

According to a PTI report, Takkar said that there was a two-year gap between prepaid tariff hikes, which is quite long. But this time around, the company is already observing the perfect time to go ahead with prepaid tariff hikes either in 2022 or 2023, whichever seems perfect.

Motilal Oswal has already said that Vodafone Idea needs another round of tariff hikes for increasing the ARPU by 1.9x so that the company can become self-sustainable.

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