AGR impact: Airtel, Vodafone Idea to hike tariffs to hike tariffs from December 1

Our Bureau Mumbai | Updated on November 18, 2019

Telecom operator cites acute financial stress

After posting combined losses of over ₹73,000 crore in the second quarter, Vodafone Idea and Airtel said they will increase tariffs from December 1.

“The acute financial stress in the telecom sector has been acknowledged by all stakeholders and a high level Committee of Secretaries (CoS) headed by the Cabinet Secretary is looking into providing appropriate relief,” Vodafone Idea said in a statement.

Also read: Airtel, Voda-Idea report combined loss of ₹73,000 cr

“To ensure that its customers continue to enjoy world-class digital experiences, Vodafone Idea will suitably increase the tariffs effective 1 December 2019,” it added.

In deep red

Soon after Vodafone Idea announced the tariff hike, Airtel followed suit. “The telecom sector is highly capital intensive with fast changing technology cycles that require continuing investments. It is, therefore, extremely important that the industry remains viable to support the vision of Digital India. Accordingly, Airtel will appropriately increase price offerings in the month beginning December,” Airtel said in a statement.

Read more: No relief on AGR, Airtel, Vodafone Idea asked to pay dues after self-assessment

Vodafone Idea recorded a loss of ₹50,921 crore in second quarter, the highest-ever for a corporate in India. The operator has provisioned ₹25,677.9 crore for AGR payments following the Supreme Court order to clear all dues towards payment of licence fee. The total dues for Vodafone Idea is estimated to be around ₹44,000 crore. Airtel had reported a loss of ₹23,045 crore. Vodafone Idea said that it is depending on relief from the government to keep the operations going.

“We are in active discussions with the government seeking financial relief following the recent Supreme Court ruling,” Ravinder Takkar, Managing Director and Chief Executive Officer, Vodafone Idea, had said after the second-quarter results.

Published on November 18, 2019

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