“The current pricing in the market is unsustainable and it’s unsustainable because it provides either very low or almost zero return on capital invested,” Vodafone Idea MD and CEO Ravinder Takkar said during the telco’s Q2FY21 earnings call on October 30. Echoing Bharti Airtel's MD and CEO Gopal Vittal’s similar concerns, Takkar said that ARPU (average revenue per user) needs to get to ₹200 in the short term and up to ₹300 in the longer term. Absence of returns in a three-player market indicates that there is an issue with pricing, he said. Throughout the call, Takkar kept repeating that the quality of the Vodafone Idea network would dampen the outflow of subscribers, lead to the acquisition of customers required, and basically act as the panacea for all of Vodafone Idea’s woes. ‘Tariff hikes are critical to improving industry health’ The government has recognised the need for ARPUs to increase, Takkar said, since the government earns a fair amount of revenue as a percentage of the licence fees and spectrum user charges. The government is already looking at revamping floor pricing and has started a consultation process to that end, Takkar said. While all the three telcos — Airtel, Vodafone Idea and Jio — supported floor pricing in their submissions to the Telecom Regulatory Authority of India (TRAI), they differed on whether or not free inter-network calling should be available; While Jio supported it, Airtel and Vodafone Idea did not. Takakr reiterated that floor pricing would be required to restore…
Please subscribe to MediaNama. Don't share prints and PDFs.
You May Also Like
News
Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...
Advert
135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...
News
By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...
News
Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...