NEW DELHI: Faster mobile tariff hikes are the need of the hour in India, said Vodafone Idea Chief Executive Officer Akshaya Moondra. Moondra, while speaking on an investor call after the company's third-quarter results, said that telecom service providers in India may hike tariffs at a gap of nine months, given the country's unique market conditions.
"In a normal scenario, the ideal time gap between two tariff hikes would be one year. However, in India, where the telecom industry is today… I would justify that a nine-month gap could also be acceptable. In a normal situation, 12 months is ideal for making any changes in tariffs. But in India, given the industry's current state, faster tariff hikes are the need of the hour,” said Moondra.
It is worth noting that all private telecom service providers, including Reliance Jio, Bharti Airtel, and Vodafone Idea, increased their tariffs by up to 25% in July 2024. Following the tariff hike, all the telcos witnessed an improvement in their Average Revenue Per User (ARPU), a key metric that indicates the revenue a company generates on average from each individual user within a specific time period.
“The increase had positively impacted Average Revenue Per User (ARPU) and the company's earnings. The effects of the tariff hike were evident in the company's second and third-quarter results,” said Moondra.
Vodafone Idea, India's third-largest telecom service provider, has narrowed its loss to Rs 6,609 crore in the third quarter of FY2024-25. The firm's Average Revenue Per User (ARPU) increased to Rs 173 in the December quarter from Rs 166 in the previous quarter, representing a 4.7% rise.
Vodafone Idea is the only private telecom service provider yet to announce the commercial rollout of its 5G network. The company, in its financial results, mentioned that it would launch commercial 5G services in Mumbai in March, followed by Delhi, Bangalore, Chandigarh, and Patna in April 2025.
Moondra emphasized that the 5G network will stem customer losses from its network. He also mentioned that due to a lack of investment in the past, the company has been unable to retain customers. However, it is now focusing on acquiring quality customers, a strategy it has been pursuing for the past few months.
“We have been able to attract customers, but our main challenge was to retain them due to the lack of investment, which we have seen for a fairly long time," Moondra said. "Really speaking, larger investments are yet to come, but even with minimal investment, we have started to see early positive signs, which are reflected in our VLR( active wireless subscribers)numbers for January and December, which have turned positive in 11 circles. This is a major improvement."
