In competition with Reliance Jio? Vi and Airtel reportedly planning a tariff hike before New Year

Vodafone Idea, which is Vi now has increased the prices of Rs 598 and Rs 749 Family Postpaid plans by Rs 50. This development has already come into place in select circles, for consumers. These plans now cost, Rs 649 and Rs 799.

After the reports on price hike have started to do the rounds, Bharti Airtel's shares increased 3.5 percent to Rs 479, while Vodafone Idea increased 2 percent to 9.98. Among operators, as per various estimates, Vodafone Idea has the highest market share at around 43 percent followed by Bharti Airtel at 28 percent. However, in the last quarter, the postpaid customer base of the telco decreased 1.6 percent sequentially, indicating the company is losing premium subscribers.

By the end of the year or early next year, ET recently announced that the telco was considering raising tariffs by 15-20 percent as the loss-making company walks a tightrope between making a financial turnaround and stemming customer losses.

Bharti Airtel will follow, but both will closely track the movements of rival Reliance Jio and better calibrate their prices.

“Prices of data and voice services need to be increased as the current levels of tariff are unsustainable for the industry.”Bharti Airtel Ltd chief executive Gopal Vittal in an interview with Economic Times. “The Indian telecom industry has witnessed high competitive intensity ever since the launch of Jio. However, despite these pressures, Bharti Airtel has managed to gradually increase its subscriber base. Going forward, we believe that the worse of pricing war is behind us and the industry would collectively look to increase tariff at regular intervals," the brokerage said in a note on November 10.

Three private telcos in the country previously raised prices in December 2019, the first time they have done so since Jio's entry in 2016. At the end of the September quarter, however, Vi's average revenue per user (ARPU) of Rs 119 still lags behind that of Bharti Airtel (Rs 162) and Jio (Rs 145).

Airtel Will Watch Market Conditions for Tariff Hike.

Sunil Mittal said in an interview with the Telecom Talk that the tariff hike should take effect, but he also claims Airtel is unable to move forward. "Current tariffs are unsustainable, but without the industry moving or the regulator moving, Airtel cannot move." In addition, he said that the second-largest telecom operator in the country must control the market conditions for tariff rates to increase.

Airtel hiked the tariff rates right after Vodafone Idea in December 2019 and Reliance Jio also preceded it. TRAI is said to be currently in the process of setting a floor price for the telecommunications industry, following which we will see tariff rates increase.

Bharti Airtel has also reframing the 4G 2G spectrum. Mittal said the company would gradually move 2G customers to 4G and also reiterated that Airtel had already closed its 3G services nationwide.

Speaking of the availability of 5G services in India, Mittal added that the existing prices of the 5G spectrum are not affordable and he also claims that India has enough time for its 5G road map.

Does it make sense for Vodafone Idea Bharti Airtel to push for a price increase till it has fixed its network? Please let us know what you feel.