By the end of the April-June quarter, Vodafone can look into raising its tariffs and immediately postpone its plan for price increases after Reliance Jio drops its telephone use cost by 25%. The third largest telco in Spain with an average user income of Rs 121 less than Bharti Airtel Rs 166 and Jio’s Rs 151 at the beginning of the month of December was planning to increase the customs tariffs by the end of the quarter. The decision by Vi does not surprise stock markets as analysts expected the telcos to reverse their tariff increase plans in February, after Jio launched offers in their 4G Jiophone to target the remaining 300 million phone users in the country and reverse the recent slowdown of their 4G customer adds. Two offerings include the VoLTE device with unlimited voice call for 24 months and a monthly data allocation of 2GB at Rs 1,999, and the same unlimited service at Rs 1,499 for 12 months. This means that the largest telco company still aims at its 500 million customer targets.
But for a stressed telco like Vi, as it did in December 2019, the JioPhone range was designed to rob the telco to achieve a tariff increase of 25-30 percent for the industry. The company will raise rates at the appropriate time. VI managing director Ravinder Takker said, Tariff increases are very necessary. There would not be easy to push through a fast tripping rise because it has a large 2G/3G user base. The combination of patchy network access and less data use by 2G/3G clients would affect Vi’s efforts to achieve any segmented price increase, particularly in the event it wants to retain its high-data users or to attract new clients into its network.
