Vodafone Idea, Airtel to raise mobile service rates from December amid financial crunch

New Delhi, Nov 18: Telecom operator Vodafone Idea and Airtel will raise mobile services rates from December 1 in the wake of ongoing financial stress.

"To ensure that its customers continue to enjoy world class digital experiences, Vodafone Idea will suitably increase the prices of its tariffs effective December 1, 2019," Vodafone Idea said in a statement.

The company, however, did not disclose the range or details of the proposed tariff hike.

Vodafone Idea last week reported consolidated loss of Rs 50,921 crore - highest ever loss posted by any Indian corporate - for the second quarter ended September 30, on account of liability arising out of the Supreme Court order in the adjusted gross revenue case. the Airtel posted a record quarterly loss of Rs 23,045 crore in the three months ended November (Q2).

The telecom sector is highly capital intensive with fast changing technology cycles that require continuing investments and therefore, extremely important that the industry remains viable to support the vision of Digital India, it said.

"Accordingly, Airtel will appropriately increase price offerings in the month beginning December," it said in a statement.

The company also said that it understands that telecom regulator Trai is likely to initiate a consultation for bringing rationality in pricing in the Indian mobile sector, which has been operating at prices that have been eroding its viability.

The Supreme Court last month ruled in favour of the government and directed telecom companies, including Vodafone Idea, to pay dues as demanded by the Department of Telecom.

Vodafone Idea said that now its ability to continue business will depend on reliefs sought from the government and positive outcome of the legal option it has.

"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," the statement said.

Vodafone Idea has around 300 million mobile subscribers.