Vodafone Idea follows Bharti Airtel, hikes tariff rates by 20-25% with effect from Nov 25

Telecom service provider Vodafone Idea (Vi) has announced that there will be a 20-25% hike in its tariff plans for prepaid users. The company said in a release dated on Tuesday, November 23, that the tariff hike will be effective from November 25, 2021. Vodafone Idea said with the release, “The new plans will start the process of ARPU improvement and help address financial stress faced by the industry.”

Vi also said that the hike will help the company to continue building and “improving India's fastest mobile network”, as verified by fixed broadband and mobile network testing applications company Ookla. The company added, “Vi remains committed to play its role in accelerating the realization of the government’s Digital India vision. In line with its commitment to providing its customers with simple and convenient products, Vi has curated an optimum range of feature rich plans for both voice and data.”

Bharti Airtel increases tariff 

The announcement by Vi comes immediately after Airtel announced their tariff hikes on Monday, November 22. Bharti Airtel announced that they will be hiking tariffs by 20-25% for prepaid users. Airtel said in a filing with the BSE on November 22 that the company has decided to hike its tariffs for its prepaid customers by 20-25 percent effective from November 26. The company further added that the rates are in line with its need to maintain the mobile Average Revenue Per User (ARPU) at Rs 200 and ultimately at Rs 300. The rates were hiked by Airtel to provide a reasonable return on capital that will allow for a financially healthy business model. Airtel said, “We also believe that this level of ARPU will enable substantial investments required in networks and spectrum and more importantly give Airtel the elbow room to roll out 5G in India.”

Bharti Airtel’s price per share soared and touched a 52-week high of Rs 749.15. The shares rose by a healthy 5% during the early hours of trades on November 22. The share prices significantly increased after the company had announced new revised mobile tariffs for the prepaid customers. This seemed to have triggered the market and caused this variation.