Vodafone Idea to Review Tariffs on a Segmental Basis, No Imminent Price Adjustment

Vodafone Idea Eyes Selective Tariff Adjustments, Not Broader Hike

Vodafone Idea, India's third-largest telecom operator by market share, is considering selective adjustments to its existing mobile tariffs, a move that would not involve an immediate across-the-board rate hike. This decision comes on the heels of Bharti Airtel, India's second-largest telecom operator by market share, raising the price of one of its long-validity prepaid plans.

According to recent government data, Bharti Airtel raised the price of its Re 859 prepaid plan, offering 84 days of validity with 1.5 GB of data per day, to Re 899. The company also discontinued its Re 799 plan with 77-day validity. This move is significant as headline tariffs across plans have remained largely unchanged for nearly two years.

The telecom industry has been struggling with declining subscribers and revenue, with Vodafone Idea being no exception. However, the company has started to show early signs of recovery, with improved additions in February and March. According to the latest Trai report, Vodafone Idea added over 1 lakh mobile subscribers in March, marking a positive turn of events.

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Bharti Airtel's move is seen as a potential test case for broader tariff hikes in the industry. Analysts believe that the Re 40 increase on the popular plan, which amounts to a 4.7 per cent hike, is likely to deliver only a modest uplift in average revenue per user (ARPU), a key metric that tracks monthly revenue per subscriber.

Tariff Comparison

Industry experts see Airtel's move as a calibrated market test, allowing the company to gauge the response of high-value users and potentially paving the way for gradual, more meaningful tariff increases. Airtel currently leads the industry in ARPU, followed by Reliance Jio and Vodafone Idea. The continued government backing as a key shareholder remains encouraging for Vodafone Idea, even as the company focuses on improving operational performance.

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