Vodafone Idea's CEO (Chief Executive Officer), Akshaya Moondra, in the recent earnings call with the analysts for Q3 FY23, shared his opinion on tariff hikes. Moondra didn't give an exact timeline for when the tariff hikes would take place, but he did share his personal opinion about the same. The chief executive said that there's a need for tariffs to go up. Moondra believes that none of the telcos is able to recover the cost of capital at the current tariff levels.
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Not Everyone Should Have to Pay More
Replying to a question on tariff hikes, Moondra said that the hikes should be implemented on the unlimited benefits plans. Not everyone should have to pay more to consume mobile network services. According to Moondra's personal opinion, consumers who use more data and voice calling should pay more than consumers who are using less. It is at the higher-end plans where the hikes should be implemented. He believes that the basic premise should be - 'you pay more for using more'.
Moondra said that gradually, as happens with essential services such as electricity and more, there's a base charge, and then there's a charge on top of it on the basis of usage. So in simple words, Moondra feels like the structure of the tariffs should be such that high-end users who consume more should pay more, and not everyone should be forced to pay more.
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Vodafone Idea is in Need of a Tariff Hike
Vodafone Idea is in need of a tariff hike as the telco's operational cash flow is in a very poor state. The telco needs a tariff hike to improve its average revenue per user (ARPU) figure. In its Q3 FY23 report, Vi said that its ARPU has reached Rs 135. While it is a growth in ARPU from the previous quarter (Rs 131 in Q2 FY23), it is not enough to put the telco in a decent state.
Vodafone Idea's net loss for Q3 FY23 stood at Rs 7,900 crore, which is approximately USD $1 billion. The telco's revenues were flat QoQ, but the loss widened. Vodafone Idea's CEO has not given any hints as to when the telco would go ahead with the tariff hike, but it should happen in FY24 positively.