Tariffs still very low, pricing revival critical for telecom sector: Birla

Topics telecom sector | Vodafone | Birla

Telecom tariffs are "still very low" and pricing revival is critical for the long-term growth of the sector, Vodafone Idea Chairman Kumar Mangalam Birla said on Wednesday.

Addressing Vodafone Idea Ltd (VIL) shareholders at the company's Annual General Meeting, Birla said the telecom industry had witnessed the first round of tariff hikes by all operators in December 2019.

"However, tariffs are still very low and therefore pricing revival is critical for the long-term growth of the sector," he said.

The Average Revenue Per User (ARPUs) in the Indian market continue to remain the lowest in the world, while data consumption is among the highest globally.

"The verdict on the long-pending industry issue of Adjusted Gross Revenue or AGR also added to the financial woes of telecom operators... Efforts from the Government of India to soften the financial burden by recommending payment through instalments has now been upheld by the Supreme Court," Birla said.

In a stock exchange filing, Vodafone Idea said multiple items - including resolutions seeking approval of borrowing powers of the company, alteration of Articles of Association, nod of issuance of securities of up to Rs 15,000 crore - as set out in its September 4 notice, were transacted at the AGM.

The results of the voting will be intimated separately, the filing said.

Earlier this month, the board of Vodafone Idea approved fund-raising plans of up to Rs 25,000 crore through a combination of equity and debt instruments, subject to shareholders' nod.

The board's move had come just days after Supreme Court directed telecom operators to pay 10 per cent of total Adjusted Gross Revenue-related dues this year, and rest of the payments in 10 instalments starting from next fiscal year.

The ambitious fund raising plans promise to throw a lifeline to cash-strapped Vodafone Idea, which has suffered massive losses, has been losing subscribers and ARPUs, and faces outstanding statutory dues of about Rs 50,000 crore.


(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel