Bharti Airtel and Vodafone Idea on Sunday announced a tariff hike in the range of 15 per cent and 40 per cent across different plans. The tariff hike by both companies will be applicable from December 3, 2019. Vodafone Idea on Sunday said its new plans for its prepaid products and services would be available across India, starting 00:00 hours of December 3, 2019.
Airtel’s new plans represent tariff increases in the range of a mere 50 paise per day to Rs 2.85 per day and offer generous data and calling benefits.
“Our new mobile plans offer tremendous value to our customers and are backed by a superior network experience on Airtel’s nationwide 4G Shashwat Sharma, chief marketing officer, Bharti Airtel, said in the statement.
Reliance Jio also said it would be introducing new plans with unlimited voice and data.
These plans will have a fair usage policy for calls to other mobile networks. The new plans will be effective from December 6, 2019.
“Although the new all-in-one plans will be priced up to 40 per cent higher, staying true to its promise of being customer-first, Reliance Jio customers will get up to 300 per cent more benefits,” Reliance Jio said in a release.
The announcement has come against the backdrop of both companies reporting massive losses in the second quarter (Q2) amid an adverse Supreme Court (SC) ruling on adjusted gross revenue (AGR).Bharti Airtel reported a pre-tax loss of Rs 31,334 crore for the quarter ended July-September (Q2) after the company provided for outstanding payments to the central government on account of the SC judgment on AGR. The pre-tax loss in the year-ago quarter stood at Rs 1,998 crore.
Vodafone Idea reported a massive pre-tax loss of Rs 36,959 crore in Q2 after it provided for payments related to AGR. The company took a hit of Rs 30,774 crore (including AGR) for the quarter. This led to a loss of Rs 50,922 crore at the net level — the highest-ever for an Indian company. The company had posted a loss of Rs 4,974 crore in the year-ago quarter, while the loss in the April-June quarter was Rs 4,874 crore.
In a massive blow to telecom companies, the apex court, on October 24, allowed the central government to recover Rs 92,641 crore in AGR from telecom operators, including Bharti Airtel, Vodafone Idea, and Reliance Jio.
The apex court ordered the telecom companies to pay as much as Rs 1.4 trillion in past statutory dues after considering non-telecom revenues for their calculation.
The companies are seeking waiver of interest and penalties on the dues and extended payment timelines instead of three months mandated by the SC.
However, in a relief to telecom companies, the Union Cabinet on November 20, 2019, announced a Rs 42,000-crore package to debt-laden telecom companies after it agreed not to take any payments for spectrum they use for the next two years.
It approved giving Bharti Airtel, Vodafone Idea, and Reliance Jio the option to avail a two-year moratorium on payments they were supposed to make in yearly instalments for the spectrum bought in auctions.
Effectively, the benefit accruing to Bharti Airtel will be about Rs 11,746 crore, Vodafone Idea Rs 23,920 crore, and Reliance Jio Rs 6,670 crore.