The third largest Indian telecom company Vodafone Idea today said that another rate hike could be in the works prior to this year end as it seeks an increase in margins to boost its liquidity. In a conference call with analysts, Vodafone Idea's Chief Executive Ravinder Takkar said the "time is now to look into an additional price hike".
"Tariff hike environment is just and we will not hesitate to lead the way on hike costs," Takkar said.
"Customers have taken the November tariff increases extremely well. Most of them have resulted in our ARPU numbers. Another increase in tariffs is likely at the end of the year." He added and noted that the average amount of ARPU or revenue per user has steadily increased from Rs104 in the year before to now Rs128.
While it's making higher from the customers it lost 15 million customers in the same time. Although its revenue increased by nearly 14% to reach Rs10,407 crores in its first quarter comparison to the same period last year however, it reported a huge net loss of 7,297 crore. The gap between its active and total subscribers is also increasing which suggests that more customers than ever before don't have an active subscription.
At present, Vodafone Idea is betting on its collaboration with Rakesh Jhunjhunwala's Nazara Tech for online gaming as well as other streaming services such as Netflix, Amazon Prime Video, Hotstar, Zee5 and others , to keep subscribers loyal. One thing that is positive, however is that the numbers of subscribers to 4G has grown from 113 million prior to the launch of 119 million today. But this is still less than 50% of Vodafone Idea's subscriber base. Because of its liquidity issues the bids made by Vodafone Idea in the recent 5G spectrum auctions were 2.3x and 4.6x less than its competitors Airtel as well as Reliance Jio in the respective auctions. And to make matters even more complicated The company hasn't set a specific date for the 5G service's launch however. Its competitors Airtel as well as Reliance Jio are likely to start their services the next month.