Customers consuming more should pay more, subscriber loss to BSNL reversing quickly: Vi official

Making a pitch for furr tariff hikes, a senior Vodafone Idea official on Thursday said telecom subscribers consuming more data should pay more to enable industry to generate reasonable returns and ensure connectivity to all sections of society.

During Vodafone Idea (VIL) earning call for second quarter ended September 30, 2024, company's CEO Akshaya Moondra said that loss of subscribers to BSNL due to recent tariff hike is quickly reversing because of state-run telecom firm's “network experience.” He said that Indian wireless sector is at a crucial junction.

Moondra said that while on one side, large investments are required to support emergence of new technology and to support explosive data growth, on or side, affordability of tariffs should be maintained to ensure connectivity to all sections of society.

"This is possible when customers who are using more will pay more to enable industry to generate reasonable return on capital on large investment that has been me. Hence, furr tariff rationalisation is needed for industry to recover its cost of capital," he said.

debt-ridden telecom firm has reported a narrowing of its consolidated to Rs 7,175.9 crore in September quarter mainly on account of increase in average revenue per user (ARPU) post-tariff hike in July.

company's mobile customer ARPU, excluding those of machine-to-machine, increased 7.8 per cent to Rs 166 on a quarter-over-quarter basis from Rs 154 in April-June period but still continues to be lower than that of its competitors Reliance Jio and Airtel.

Though tariff hike resulted in company losing customers on a quarterly basis, Vodafone Idea CEO Akshya Moondra still indicated need for anor hike to cover cost of capital.

After tariff hike, all three private operators Reliance Jio, Bharti Airtel and Vodafone Idea lost a significant number of subscribers to BSNL that largely provides 3G service and 4G in select telecom circles.

VIL's overall subscriber base declined to 20.5 crore from 21 crore and 4G subscriber base to 12.59 crore from 12.67 crore on a quarter-on-quarter basis.

He said that September quarter is a weak quarter for subscriber growth which has in turn ded to decline.

"However, impact of BSNL has been re in this quarter, we have seen that impact reversing quite quickly, from August to September to September to October, and October to November," Moondra said.

He said that in some manner VIL is inching towards position which was re before tariff hike but some loss which has happened during quarter will still take some time to unwind.

"We believe it will happen based on customer experience because re is definitely a differential in experience for a customer who is a high user of eir data or voice," Moondra said.

BSNL has plans to roll out 4G services across India by mid of next year.

During reported quarter, VIL concluded a mega deal of about USD 3.6 billion (approximately Rs 30,000 crore) to aggressively update its 4G network and launch 5G services in select circles.

company has announced plans to boost its network capacity with a total capital expenditure of about Rs 10,000 crore during current fiscal year.