Vodafone Idea May Shut Shop in Absence of Tariff Hike: Report

Vodafone Idea (Vi), the third-largest telecom operator in India, may have to shut shop in the near future if the tariff hikes aren’t implemented. The telco is facing heightened competition from its rivals, Jio and Airtel. While the competitors have launched 5G, Vodafone Idea is still waiting for fundraising so that it can place commercial orders for 5G equipment. According to a CNBCTV-18 report, Kotak Institutional Equities said in a recent note that in the absence of tariff hikes, Vi won’t be able to keep up with the investments required and launch 5G services.

This would then lead to subscriber loss and make fundraising even more difficult. If this happens, the telco may have to shut shop, said the brokerage. When the relief measures were announced back in September 2021, the talks about duopoly in the Indian market had subsided. The government also took equity in Vi earlier this year so that the telco could go ahead with the fundraising, but even that hasn’t happened yet.

Read More – Will 5G Era in India See Another Private Telecom Operator Emerging

Kotak said that a “duopoly” in the Indian telecom market is likely to play, with Reliance Jio and Bharti Airtel as the two major players. Both Reliance Jio and Bharti Airtel are rolling out 5G at a super speed, making India’s 5G rollout the fastest in the world. Meanwhile, Vodafone Idea can’t even confirm the 5G rollout timeline before raising funds.

Read More – Vodafone Idea Shares Slip Below Rs 6 on Tuesday Morning

On Tuesday morning, the telco’s shares slipped below Rs 6. But on Wednesday morning, there is a slight recovery of 2.54% as the stock is trading at Rs 6.05. Telcos need to hike tariffs soon. Bharti Airtel has already taken a small step towards hiking tariffs by removing the Rs 99 recharge plan as the base option for users in all telecom circles in India and making the new base option the Rs 155 plan.