Vodafone Idea (Vi) has been waiting for the telecom industry to go ahead with the tariff hikes. The telco wants to see its average revenue per user (ARPU) rising significantly so that it can recover slightly from the losses it has been through. Vi must be very happy with Airtel right now. Bharti Airtel is paving the way for Vodafone Idea to follow. If you don’t understand, let me add some perspective. Vodafone Idea can’t alone increase tariffs. This is because if Jio and Airtel don’t raise prices, the subscribers of Vi will jump to the networks of the other operators looking at their cheaper priced plans.
Vodafone Idea Following Airtel In Hiking Tariffs
Right now, Bharti Airtel is like a big brother for Vodafone Idea. The latter has been following the former in terms of releasing prepaid plans in the market and raising tariffs. Right now, only two operators seem to be desperate for tariff hikes. These are Bharti Airtel and Vodafone Idea; understandably so as both, the companies have been through some tough times.
But while Airtel has seemed to recover well, Vi has been struggling. Vi already has a very small subscriber market share compared to Reliance Jio and Bharti Airtel. Thus, by hiking tariffs first, it wouldn’t want to risk losing even more subscribers to its competitors.
But Vi is always on edge looking at what Airtel is doing. If Airtel goes for a tariff hike, the same move is made by Vi as well. For example, Airtel recently announced that it would be discontinuing the Rs 49 plan; the same was done by Vodafone Idea as well. Even in terms of prepaid plans, Airtel and Vi's plans don’t look much different in terms of price and the data benefits they offer to the users.
Vi can follow Airtel because it will help the telco financially. Airtel can move freely because some of its plans don’t have any competition from Reliance Jio, and thus Vi can also follow Airtel without any hesitation.
Vodafone Idea Rooting for Tariff Hikes from Airtel
Because of what I said above, it is very understandable that Vodafone Idea would be rooting for Bharti Airtel to go ahead with the tariff hikes. This will help both the operators financially by improving their ARPU.
Mittal has already said that Airtel won’t shy away from raising tariffs. But the only question is when will that happen. If it happens too late, that would be very bad for Vodafone Idea. Vi wouldn’t even be thinking about the long-term right now. The third-largest telecom operator must be wondering about how it can survive the short-term debt onslaught that’s coming its way in the form of adjusted gross revenue dues and other statutory dues mixed with bank loans.