Won't Wait 2 Years, Tariff Hike Likely In 2022: Vodafone Idea CEO

Vodafone Idea (Vi) Chief Executive Officer (CEO) Ravinder Takkar on Monday said the telecom company could raise tariffs this year.

All the three private telcos — Reliance Jio, Airtel and Vi — hiked their prepaid tariff plans by around 20 per cent in November last year. While this has led to an increase in the average revenue per user (ARPU) for the companies, it has impacted recharges and resulted in consolidation of SIM cards, especially for Vi.

Takkar said another tariff hike is possible in 2022 but would depend on how well the market absorbs the recent increase.

“It’s possible that there could be another price hike in 2022. Certainly at some point, a price hike will take place. This last one that took place was almost two years later, which I believe is a bit too long. So we certainly would expect less than two years. But in 2022, we will have to wait and see how quickly these prices get embedded, probably potentially it (tariff hike) could be in 2023 as well,” Takkar said in a post-result conference call on Monday.

Vi’s loss widened 59.5 per cent to Rs 7,230 crore in the December quarter (Q3FY22), while revenue fell on a year-on-year basis.

On a sequential basis, the company fared better, registering a 3.3 per cent increase in revenue. ARPU for the quarter rose 5.2 per cent to Rs 115 on a sequential basis. Takkar said the effect of price hike will be visible in the fourth quarter as well.

The company, however, lost 5.8 million customers in Q3.

During the quarter, its 4G user base expanded and the company said it will focus its investments to increase its coverage and close the gap with rivals.

On fundraising, Takkar said there is renewed interest among investors, especially after the company opted to convert interest on deferred liabilities into equity for the government. “We target to conclude (fundraising) exercise in this fiscal,” he reiterated.

Chief Financial Officer Akshaya Moondra said the company expects to save around Rs 1,600 crore annually by not opting to pay the interest and will use the proceeds for network expansion. Also, the government has initiated the process of releasing around Rs 17,000 crore of bank guarantees, in line with the telecom reforms package, and the company hopes to avail of new funds and non-fund based facilities from banks in lieu of them.

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